Treasury Secretary Donald T. Regan denied tonight that the administration sees any need to compromise on its three-year, 30 percent tax-cut plan.
Regan said, "I see no compromise at this time. There is no need for it. . . . The Democrats are coming toward us. Why should we go toward them?"
Last Sunday, Rep. James Jones (D-Okla.) said he had been approached by administration officials who indicated the president was willing to accept a watered-down version of the White House tax plan. Many congressional Democrats fear a 30 percent tax cut over three years would be inflationary.
The White House insists such a tax cut is needed to restore incentives for Americans to work harder to save more.
Regan, at a press conference preceding an address to the New York Financial Writers Association, said he does not know how Jones got the impression the administration was willing to back off the tax program. He said Treasury officials are in the process of visiting all 23 Democratic members of the House Ways and Means Committee "to convince them of the worth of our program." He said Jones was the 13th Democrat visited.
"I don't know" how Jones got the impression the administration was willing to compromise, he said. "Our people were not there to suggest compromise, but were trying to explain to Jones why he should support our program."
The White House is using the current congressional recess to push the president's tax plan in an effort to regain the political momentum on the issue.
In his speech to the financial writers, Regan called on business executives to support the personal tax cuts proposed by the president as well as the corporate tax reductions.
The Treasury secretary said, "Too many business leaders still fail to see the connection -- in their own self interest, if you will -- between personal income tax rates and investment." He said that once they "catch on" to the concept of supply-side economics, "they will realize that the old categories of personal versus business tax cuts don't make any sense."
He said the personal income tax cuts will increase savings, improve work attitudes, lower wage demands, contribute to better labor productivity, and increase incentives to invest in stocks. "What 'business tax cut' does more?" he asked.
In another area, Regan said that the finance minister of Great Britian, France, West Germany and Japan -- the so-called Group of Five -- told him at a weekend meeting they were somewhat dismayed that he failed to promise to get U.S. interest rates "down right away." But they were supportive of the administration's attempts to reduce the rate of inflation, he added.
Leaders of the major industrial nations are upset with the high interest rates in the United States, because they make it attractive to foreigners to invest here. This in turn boosts demand for dollars and keeps the value of the dollar, the more expensive are many imports, especially oil. Most European economies, as well as Japan, must import most of the oil they consume.