President Carter's nomination of Donald C. Lubick as the administrator's top tax policy official is being held hostage in a congressional flap over the Treasury's new guidelines for enforcing the 1976 anti-boycott law.
At a Senate Finance Committee hearing on Lubick's confirmation, Sen. Abraham Ribicoff (D-Conn.) announced he would block any vote on the nomination "until I receive an explanation" on the guidelines from top Treasury officials.
The dispute involves a Treasury decision last December concerning a provision in the 1976 law that calls for denying big foreign tax breaks to Arab boycott against Jewish-owned companies.
Ribicoff objects to a regulation affecting letters of credit issued through U.S. banks to foreign exporters. The senator contends the Treasury regulations are so liberal they allow banks to escape punishment.
Ironically, Lubick, who was the Treasury's tax legislative counsel when the guidelines were drafted, actually had recommended tougher language, but was overruled by higher officials.
Lubick is being considered for the job of assistant secretary of the Treasury for tax policy, a post formerly held by Laurence N. Woodworth, a longtime congressional tax expert, who died in December.
The Ribicoff action is not expected to have any serious effect on tax policy making. Lubick has been serving as acting assistant secretary for the past several months, managing the president's tax cut package through Congress.
Ribicoff accompanied his announcenent yesterday with a lengthy criticism of the Treasury, charging that the guidelines were softened because "the big banks in this country leaned on the Secretary . . . to manipulate" the rules.
He said before the Lubick nomination is approved, "the committee has an explanation coming" from Treasury Secretary W. Mitchell Blumenthal "about what the hell is going on."
The flap over the Treasury's regulations involves the question of whether the guidelines deal adequately with banks that agree to require exporters to cetify that they are not doing business with Jewish-owned firms.
The Treasury contends that it can crack down legally on such practices if the exporter involved is a U.S. citizen, an Israeli citizen or has a largely Jewish management, but not in other cases. Ribicoff disagrees.
Ribicoff's action came after Lubick first was asked to assure committee members that he would not rule harshly on several of their pet tax projects - a request he fulfilled in some cases and skirted in others.
Sen. Mike Gravel (D-Alaska) first asked about a government "stock ownership" plan in his state. Several senators expressed fears that Treasury might rule that receipts from TV coverage of college sports should be taxed.
Lubick said the administration did not regard earnings from TV coverage of college sports as taxable. He side-stepped several other issues.