The Senate Finance Committee yesterday heard three Republican economists express strong opposition to the tax bill passed by the House with the support of President Reagan last year.
Two of the economists, former Council of Economic Advisers chairman Murray L. Weidenbaum and former Treasury assistant secretary Paul Craig Roberts, had been members of the Reagan administration. Former CEA chairman Alan Greenspan worked in the Nixon and Ford administrations. None had worked on the tax-overhaul proposal Reagan made to Congress last spring.
Greenspan said the House-passed bill, which would transfer about $140 billion in taxes from individuals to companies over five years, "creates risks which I suspect are larger than we should be willing to take." The legislation could severely damage manufacturing industries, which already have been hard hit by the strong dollar and high interest rates, Greenspan said.
Weidenbaum said the budget and trade deficits were far more pressing problems, and Roberts said his studies had not turned up a single sector of the economy that would be helped by the bill. Reagan had pushed for the House legislation, Roberts said, because he was not fully aware of its provisions and because the administration had done no analysis of its effects. (Actually, the CEA did an analysis and concluded the legislation would improve long-term growth prospects.)
Senate Finance aides have said the hearings will include witnesses both for and against the House bill.
"My own view is, the case is being laid for a new tax to protect corporate loopholes," said Sen. Bill Bradley (D-N.J.), a proponent of tax overhaul. He added that some of the economists scheduled to testify next week are more favorably disposed to the House bill.
The committee yesterday announced that it will hold a hearing Monday on the minimum-tax provisions of the House bill. Following that will be two more days with economists and a fourth hearing for which the witnesses have not been announced.
Finance Committee members seemed to enjoy eliciting criticism of the House bill from the witnesses, even though the legislation will not be used as a starting point for their deliberations. At one point, Sen. John Chafee (R-R.I.) asked all three, "Is this bill beyond redemption?" They agreed it was.