TO JUDGE BY the spectacle last week when Democrats in the House gave up on trying to write a new tax bill, the Democratic Party is frozen -- stymied by political anxieties and the fear of interest groups alligned with their Republican rivals.
Last week, big business and the independent oil lobby helped scare the Democrats out of making any attempt to exploit what ought to be their best issue in 1982, the apparent "unfairness" of the Reagan economic program. Instead, House Democrats allowed the Republican Senate to take full credit for a tax bill that by any standard is anti-business and anti-rich.
Curiously, the interest groups the Democrats think they are courting by their failure to act on tax increases are, almost without exception, determined to help Republicans beat Democrats next November. Just as curiously, the corporate lobbies that Senate Republicans offended with their tax bill appear willing, even eager to turn the other cheek, and continue giving most of their political contibutions to Republicans.
To be fair, the Democrats' inability to act on taxes was more than an effort to curry favor with corporate interests. Many Democrats in the House believed that if they tampered with the Republican tax bill, they would be blamed for the substantial tax increases -- $98 billion over the next three years -- that it contains. Better, these Democrats reckon, to give the Republicans their entire program, then blame the economic consequences on the GOP.
But by itself, this political consideration would not have been sufficient to block House action on a Democratic alternative to the Republican Senate's tax bill. House Democrats flinched when a proposal to increase taxes on independent oil producers was raised by Rep. Daniel Rostenkowski (D- Ill.), chairman of the Ways and Means Committee.
Rostenkowski was echoing majority opinion on his panel; the betting on both sides of the aisle was that if the Ways and Means Committee had written a tax bill, new oil taxes would have been part of it. But powerful Democrats wanted no such tax.
The issue became a quiet conflict within the Democratic leadership. The failure to act was a defeat for House Speaker Thomas P. (Tip) O'Neill, Jr., (D-Mass.), whose Republican opponent has received strong backing from oil interests in Texas and Oklahoma, and a victory for Rep. James Wright (D- Tex.), the majority leader, who has been struggling to maintain oil support for Democrats in his home state as the Republican party there grows in strength.
Wright was supported by a number of pro- oil Democrats, notably Rep. Tony Coelho (D- Calif.), who happens to be chairman of the House Democratic Campaign Committee. Coelho's district includes oil lands, and he openly acknowledges that he is trying to get independent oilmen to give more money to his campaign committee.
"I've said openly that independent oil in the past has been actively Democratic," Coelho argued. "They should be back in."
But independent oil has other ideas. It not only played a significant role in the defeat of at least eight Northern Democratic senators in 1980, along with such House members as former Democratic whip John Brademas (D- Ind.), but it is now leading the charge against vulnerable Democrats and in support of marginal incumbent Republicans.
Examination of the reports of such key independent oil political action committees (PACs) as the Dallas Energy PAC, the Louisiana Energy National PAC and the Houston PAC shows an overwhelming preference for Republicans. Through April of this year, the Dallas PAC, for example, handed out $71,000, every cent of which went to Republican candidates, all in amounts of $2,000 to $5,000.
In other words, Democrats were unwilling to go after an industry that in large part is committed to the achievement of a Republican Congress. Even such pro-oil Oklahoma Democrats as Reps. James R. Jones, Mike Synar and Dave McCurdy are discovering that their opponents are getting substantial backing from individual oil producers and PACs.
Moreover, this is an industry with little public support. A Louis Harris survey conducted in April for Business Week magazine showed the public in favor of taking back oil tax breaks by a margin of 78 to 17.
In direct contrast, Senate Republicans, particularly those on the Senate Finance Committee, took on, with apparent impunity for the Republican Party, a whole network of groups that are strong GOP supporters.
The Senate-passed tax bill includes, for example, restrictions on tax benefits that go to contractors who have multi-year contracts with the government. These restrictions were bitterly opposed by the Associated General Contractors. In its July 7 newsletter, the AGC listed the committee vote, which showed that the seven committee members "for AGC position" were all Democrats, while the the 13 "against AGC position" included 11 Republicans and two Democrats.
Two weeks later, AGC's July 21 newsletter listed 94 candidates who had received contributions ranging from $1,000 to $5,000 during the week of July 14-20. Of the 94 beneficiaries, 87 were Republicans.
On a broader scale, the tax bill put together by the Reagan administration and Senate Republicans takes back a set of investment tax breaks considered essential to a strong business economic recovery by the U.S. Chamber of Commerce.
On July 1, the day the Republicans on the Finance Committee completed the tax bill (which the Chamber's chief economist described as a victory for "the forces of darkness"), the Chamber gave out to its members a confidential list making recommendations in 84 Senate and House races. In 82 of those races, the recommended candidate is a Re publican.
Even special interests who have been palpably hurt by Reaganomics seem determined to help Republicans defeat Democrats this November. For example, the realtors, whose members have been severely hurt by the recession and the administration-backed tight money policy at the Federal Reserve -- not to mention the presidential veto of special housing aid -- continue to remain loyal to the GOP and to Boll Weevil Democrats who backed the administration.
Through April of this year, the Realtors PAC gave $221,176 to Republicans and $112,758 to Democrats, an apparent 2-to-1 split. Of the money going to Democrats, however, $72,250 went in large chunks of $3,000 to $5,000 to conservative Southerners who had backed the Reagan administration's budget and tax legislation last year, while the remainder went in relatively small dollops of $200 to $500 to liberal and moderate Democrats.
This kind of loyalty to conservative politicians in general, and to Republicans in particular, has given the GOP exceptional political autonomy. The freedom allowed the Republican-controlled Senate under the direction of Finance Committee chairman Robert Dole (R-Kan.) to pass a tax cut benefiting business and the wealthy in 1981, when public opinion was very supportive of the administration program; and then in 1982 to raise taxes primarily on corporations and the rich at a time when public opinion had shifted because of the perception that Reaganomics favored the rich.
This isn't all bad for the Republicans' traditional friends; the Dole tax increase this year is about a quarter of the size of the Reagan tax cuts of last year. At the same time, Dole's bill is masterful public relations, and the Democrats have been utterly unable to counter it.
The Democrats' posture of inaction accelerates the process started by the 1980 election in which Democrats are being forced farther and farther from the center of the debate over national issues. For 50 years, gut questions of social and economic policy were fought out almost entirely within the Democratic Party, as Republicans remained largely on the sidelines. In 1981, President Reagan took over center stage, crushing efforts within the Democratic Party to regain its voice.
Enactment of Reagan's proposal to cut taxes by $749 billion through 1986 insured that subsequent deficts would dominate congressional debate. And the question of reducing deficits is inherently an issue that favors Republicans seeking to cut the size of the federal government, over Democrats who have strong ties to spending programs.
If, as it now appears, Republicans have partially defused the issue of tax equity, the GOP has further strengthened its control over the national economic debate.