Senate Finance Committee chairman Russell B. Long (D-La.) said yesterday he would be willing to trim back the $3 billion in extra capital gains tax cuts his panel voted earlier in an effort to compromise with both the House and the Carter administration.
While not specifying how much he would pare back the measure, Long indicated the Finance panel had bloated its capital gains cuts intentionally to give the Senate some bargaining chips when the tax bill goes to conference. "We'll have to compromise in conference," he said.
At the same time, Long said the administration has agreed to revise its estimating procedures in a way that would reduce the official cost of the Finance panel's capital gains cuts to just under $2 billion, by taking account of the impact of the move in spurring the economy.
The shift, confirmed in principle by administration officials, would mark a significant concession. Long and other conservatives have contended the Treasury has exaggerated the revenue drain resulting from reductions in capital gains taxes by ignoring this economic "feedback."
Long made his remarks after calling off a scheduled markup session on the tax bill yesterday to give Democrats and Republicans time to work out their differences on key provisions of the bill. The committee will meet again on Monday if the two sides can work out a compromise.
Long told reporters later that the committee was too divided to make much more progress on the bill until the differences were resolved. "Sometimes we make better progress by discussing with senators what they are determined to insist on," he said.
The capital gains tax cuts approved by the House would cost about $1 billion, or a third of the net relief the Finance Committee voted. President Carter has threatened to veto the bill if the House provisions are enlarged.
Long also indicated yesterday he may offer to compromise on another provision in the House bill that he earlier had opposed - a proposal for a once-a-lifetime forgiveness for homesellers under which they would be able to take their first $100,000 in profix tax-free.
Previously, Long had said flatly he planned to drop the proposal in the Senate version of the bill. Yesterday, however, he told reporters his major concern was to ensure that homesellers pay some tax on profits in excess of $50,000 - a hint at a possible compromise.
The cancellation of yesterday's market session left the Finance Committee that much more behind schedule in its efforts to complete work on the tax bill. Long had hoped to finish last Wednesday, but was stymied when panel members insisted on approving narrower, election-year measures.
The Louisianan said yesterday he still hopes to finish drafting the tax bill late next week, with Senate floor action scheduled for the week of October 1 - barely in time for the tax bill to make it through a House-Senate conference before Congress adjourns.
Long said he also is planning, tentatively, to schedule a conference committee session on the tuition tax credit bill next Thursday and possibly resume the longstalled conference on the energy tax bill early on Friday.