Some prominent backers of the $749 billion Reagan tax bill now are suggesting that some provisions either be eliminated or postponed in an effort to keep down the deficit as the split over new budget cuts grows between GOP congressional leaders and the White House .
Rep. Kent Hance (D-Tex.), principal cosponsor of the House version of the tax cut, has suggested to the White House that the 10 percent cuts in personal income tax rates scheduled to go into effect on July 1, 1982, and then again a year later, be postponed for three months each, for a total savings of $17 billion.
In the Senate, Ted Stevens (R-Alaska), the majority whip, argued in closed Republican meetings for a four-month postponement of the first 10 percent rate cut. He argued that the action is an essential part of the effort to bring down interest rates which, he said, have proved particularly costly to the defense budget. The costs of defense procurement are shooting up because the contractors are being forced to pay high interest charges on construction financing, he said.
Sen. John C. Danforth (R-Mo.), one of the senior Finance Committee members, said yesterday that he is thinking along similar lines. "I think it will have to be a balanced effort," Danforth said, arguing that reducing the deficit could be achieved through a combination of smaller tax cuts and spending reductions, instead of concentrating on budget cuts entirely.
At this point in the struggle to bring down the 1982 deficit, their suggestions, along with some separate proposals that Frost Belt Republicans are expected to produce, are in a distinct minority.
Testifying at a House Budget Committee hearing, Murray Weidenbaum, President Reagan's chief economic adviser, dismissed Hance's proposal, equating it to a tax increase in light of the tax-cut enactment. "We do not want to raise taxes," Weidenbaum said under questioning.
Similarly, after a meeting of the Republican congressional leadership, Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) said postponement of some of the tax cuts "came up, but it did not find any significant support." Sen. William L. Armstrong (R-Colo.), a member of the Finance Committee and a strong backer of the Reagan economic program, said "there is talk" of delaying some of the tax provisions, "but it's not catching on."
Although such suggestions have only peripheral support among backers of the Reagan tax bill, they are being capitalized upon by Democratic critics. Postponement of the rate cuts offers a very simple mechanism for reducing the deficit, and is a direct response to one of the major complaints of key Wall Street figures who contend that the tax bill is too large.
At a press conference before yesterday's House session, Majority Leader Jim Wright (D-Tex.) contended that if the administration plans to achieve the goal of a balanced budget in 1984, it faces three choices: "One, military defenses would have to be reduced dramatically, or two, Social Security and retirement benefits would be savagely slashed, or three, substantial portions of the projected tax cut must be deferred."
With evident pleasure, Wright pointed out that the third "suggestion has been made by Hance, a cosponsor of the president's bill" and that postponing individual rate cuts has been endorsed by the National Association of Realtors.