The Carter administration desperately trying to counter the House Ways and Means Committee's tax bill, began a "13th-hour" effort yesterday to undo key portions of the measure when the bill reaches the House floor.
Led by Treasury Secretary W. Michael Blumenthal, a administration lobbyists called on key panel members to propose a new three-part floor amendment that would shift more of the bill's tax cuts from higher-income brackets toward the poor.
The administration also wants to trim back some of the $1.8 billion reduction in capital gains taxes the panel approved last week. Capital gains are the profits from the sale of stocks or other property. Only half a gain is taxed.
The procedure was regarded as highly unusual. Traditionally, when the House considers a tax bill, the only floor amendments allowed involve proposals that the Ways and Means Committee already has considered and rejected.
Committee sources said it still was too early to tell whether the administration would be successful in pushing it plan on the floor. Informal interviews with some members indicated support for the Treasury proposal was slim.
All sides agreed the prospects depended almost entirely on action by the House Rules Committee, which decides on parliamentary procedures on all bills before they go to the House floor. The Rules Committee is scheduled to take up the tax bill on Tuesday.
Although precise details have not been fully worked out yet, the administration's plan esssentially includes these elements:
A move to skew more of the bill's individual tax cuts to persons in the $15,000-and-under brackets by blocking the committee's proposed repeal of the present $35-a-person general tax credit, and raising the credit to $100 a person.
Trimming back a proposed reduction in capital gain taxes, possibly by raising to 15 percent the new 10 percent "alternative minimum tax" the panel voted to substitute for the existing 15 percent minimum tax on capital gains.
Striking a provision by Rep. Bill Archer (R-Tex.) that would provide for the first time an "inflation adjustment" for capital gain taxes. The Archer proposal which the committee formally adopted as part of its bill, ultimately would slash capital gains taxes in half.
Blumenthal also is reported to have told the legislators the administration would prefer the House to vote separately on any Social Security tax relief proposal, rather than include it along with the Treasury's plan. The reason: To avoid added controversy for his own provisions.
Sources said the administration still has not decided whether it wants the three-part package offered as a separate floor amendment or made part of one of two liberal amendments the Ways and Means Committee has recommended be permitted.
However, some Democrats were apprehensive that if the leadership allowed the administration to bring up its floor amendment. House leaders also would have to permit a separate vote on the GOP-backed Kemp-Roth tax cut proposal, which Democratic leaders bitterly oppose.
The Ways and Means Committee has recommended allowing Republicans to offer the Kemp-Roth bill as a separate floor amendment, as part of a promise to panel Republicans who supported the committee's bill. But House leaders are seeking to block the move.
The administration's latest push began late Tuesday, at the suggestion of Rep. Dan Rosteatowski (D-Ill.). Blumenthal first met privately with House Speaker Thomas P. O'Neill Jr. (D-Mass.) and Rep. Al Ullman (D-Ore.), the Ways and Means Committee chairman, then carried it to other committee members yesterday.
Sources said the effort marked an attempt by the administration to reduce its losses when the tax bill reaches the House floor. The measure approved by Ways and Means amounts to a political rebuff of the president's original tax proposals.
Meanwhile, the White House, seeking to head off speculation of any disagreement between Blumenthal and the president, issued a statement late yesterday asserting that the secretary "has the full backing and confidence of the President in his task."
Last week, when Blumenthal attempted a compromise on another tax issue, he effectively was undercut by Jody Powell, Carter's press secretary. Powell told reporters flatly that Blumenthal had not been authorized to strike any bargains on the issue.