The chairman of the House Budget Committee said yesterday that Reagan administration officials have indicated unofficially their willingness to accept a one-year personal income tax cut instead of the three-year, 30 percent cut the president has proposed.
Rep. James R. Jones (D-Okla.), the chairman, interviewed on "Face the Nation" (CBS, WDVM), said: "There is a growing feeling that if you have the three-year, 30 percent cut in taxes that you're leaving yourself wide open to a very large deficit the third year out, and so I believe that the administration, in the indications that I've received unofficially, will be willing to work with the Congress on the tax bill and will be willing to compromise."
A part of that compromise, Jones said, would be, in effect, a public promise by Congress that it would follow through with the second and third years' cuts if federal spending is slashed enough to hold down the size of the budget deficit. Such a promise would not be legally binding, Jones acknowledged, but he said political pressure could make it so.
Administration officials from President Reagan on down have declined to speculate publicly on how they would respond if Congress does not pass intact its economic recovery package of personal and business tax cuts and large spending reductions.
Jones' comments are the strongest indication so far that the administration may be prepared to accept a one-year tax cut. However, an aide to Rep. Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, said Rostenkowski, too, had indications the administration would compromise.
Rostenkowski last week proposed a one-year, $40 billion tax cut that included some items, such as a reduction in the so-called marriage penalty, not in the Reagan package. The cut in the first year of the Reagan plan would be $54 billion.
Jones said the possibility of an economic downturn argued "that we take as much of the risk out of the [Reagan] program as possible, and why we try to take it one step at a time, rather than having a three-year automatic tax cut without leaving any room for adjustment due to conditions that might occur in the economy."
The administration claims its economic recovery plan would generate faster real growth and less inflation simultaneously, while producing a narrowly balanced budget in fiscal 1984. The Congressional Budget Office, using a different economic forecast, concluded the plan would result in a $49 billion deficit that year.
Jones' Budget Committee last week approved a Democratic alternative to Reagan's recommended fiscal 1982 budget. The alternative called for a somewhat smaller deficit than the $45 billion proposed by Reagan and did not include all of the spending cuts he wants. Yesterday Jones said the committee's budget resolution "endorses three-quarters of President Reagan's spending cuts."
On the Senate side, Republicans on the Budget Committee are also skeptical of the administration's economic forecast and worry that the deficit might swell if the economy grows more slowly and the inflation rate does not come down as rapidly as predicted. Last week three of them joined Democrats in voting down a version of the 1982 budget resolution that included both the three-year tax cut and large deficits.
Jones said the biggest difference between the House Budget Committee's version and the administration proposal lies in the tax cut, an issue "that will be taken to the House floor."
"But I have already received communications from different people in the administration, who indicate that the administration wants to work together to try to reach some compromises to get this budget through the Congress," he said. "We've notice already some signals from the White House indicating that there will be some compromises to get the bill through the Senate Budget Committee."
And Jones continued, "Personally, I think the administration has laid the groundwork very well to allow us to do some of the things that this country has been needing to have done. . . . In no way are we trying to obstruct the thing. We're trying to improve on it and I think we'll continue to."
The budget debate will resume in Congress on April 27 after an Easter recess. Ways and Means will begin marking up a tax cut bill about May 4.