Last Thursday evening, as the Senate droned on, four Republican senators plotted a new strategy to preempt President Carter's imminent turn-around on tax reduction and inform the nation that Repubicans no longer prescribe castor oil for economic sickness.
The hour-long session in a Capitol hideaway reached this conclusion: from now on, Republicans will offer a permanent tax-cut amendment to each and every money bill. Although chances of passage in the Democratic-controlled Senate are zero, the move will reiterate Republican primacy as the party of tax reduction.
Ironically, the nay-saying old doctors of the GOP are simultaneously complaining about too much tax-cut elixir dispensed by Ronald Reagan and yearning for old-fashioned Republican castor oil, heavy on budget cuts. Popular though this prescription is with economists and bankers, Republican senators and House members -- and presumably Reagan, too -- know it as a prescription for defeat.
That is why Republican tax-cutters on Capitol Hill are worried by reports Carter will unveil a tax cut, effective Jan. 1, that could outflank them (as we forecast in mid-May). These Republicans have been asking themselves how to convince the country that Republicans have the tax-cut copyright, while Democrats are plagarists.
That was pondered Thursday evening in the Capitol hideaway by Sen. William Roth of Delaware, the lesser known and less flamboyant co-author of the Kemp-Roth tax reduction bill. Also present were two ardent tax-cutters, Sen. James McClure of Idaho and William Armstrong of Colorado, plus an important ally: Sen. Robert Dole of Kansas, senior Republican on the Senate Finance Committee.
They decided to offer a tax-cutting amendment to every money-related bill in the Senate (a procedure not permitted under more restrictive House rules). Five bills are early candidates: the debt ceiling, airport trust funds and three minor tax bills.
Tentatively, the amendment will cut personal income taxes in all brckets by 10 percent (the first-year proposal of the three-year Kemp-Roth), will index future tax rates to cover inflation, and will provide accelerated tax depreciation for business. Like Carter's expected proposal, the cuts would take effect Jan. 1. Roth & Co. prefer an immediate slash in tax withholding, but seem foreclosed by rigidities of the congressional budget process.
The Roth amendment's price tag for the first 12 months is $21 billion, about what the president is considering. But whereas Carter will likely provide only a one-year tax credit, Roth would change the tax code permanently with reduced rates and indexing.
If that nuance is too subtle for voters to catch, at least Republicans can celebrate with profit the phalanx of Democratic "nays" to tax reduction on vote after vote after vote, beginning immediately. Attaching a hopeless congressional rider to repeated bills for propaganda purposes is a hoary Capitol Hill tactic dating back at least to the Wilmot Proviso against extension of slavery, which never passed but popularized the issue.
Roth's ploy also will interfere with efforts by self-styled traditionalist Republicans to mute Reagan's tax trumpet. The taste of castor oil was hinted on NBC's "Meet the Press" June 15 when ex-Treasury Secretary George Schultz, now a Reagan economic adviser, subtly stressed spending cuts and deemphasized tax cuts. His "modification" of Kemp-Roth would have been even greatert had he been pressed by his questioners.
Shultz reflected incessant pressure on Reagan to soft-pedal Kemp-Roth, or at least stretch it out. Having taken the innovative step of urging tax reduction for long-term economic growth during raging inflation and relatively low unemployment, Reagan is now being urged to throttle back, even as the recession deepens. Just when Jimmy Carter reverses his field on tax reduction, Reagan is asked to move toward the president's lower level, which would blur any distinction between them.
That makes no sense to those senators who cooked up their tax-cut strategy Thursday night. Nor does it seem reasonable to rank-and-file House Republicans, who a month ago defied party leaders and followed the urgings of Rep. Jack Kemp to vote against a budget built on increased taxes.
Reagan himself agrees. When asked last week during sessions with Eastern newspaper editorial boards about tax reduction, Reagan mustered new arguments to bolster his strategy, asserting that constant Puerto Rican tax reduction has boosted revenue. He is thus allied with those Republican senators who prefer elixir to castor oil for what ails their party and their country.