The Senate yesterday rejected a Democrat's move to sidetrack President Reagan's proposed tax cut of 30 percent over three years in favor of a scaled-down alternative that would have sharply reduced the anticipated deficit for next year.
While not committing itself to the so-called Kemp-Roth tax cut embraced by the Reagan administration, the Senate voted, in effect, to allow room for the $54 billion Reagan tax cut in its preliminary budget for fiscal 1982.
The vote was 74 to 14, with most Democrats joining all Republicans except Larry Pressler (S.D.) and Lowell P. Weicker Jr. (Conn.) in opposing the alternative proposed by Sen. Ernest F. Hollings (D-S.C.), ranking Democrat on the Senate Budget Committee.
For next year, Hollings tax cut would have cost $21.4 billion, or $32.5 billion less than Reagan's proposed cut -- thereby reducing the anticipated deficit of $48.8 billion to $16.3 billion.
As of 1982, Hollings would have eliminated the "marriage penalty" from the personal income tax, increased tax incentives for savings and given businesses a faster tax write-off for decpreciation of their assets. But he would have deferred any cuts in individual or corporate tax rates until 1983.
In concentrating on savings and investment incentives, Hollings described his proposal as more in tune with Reagan's "supply-side" economics than Reagan's own tax cut. But Budget Committee Chairman Pete V. Domenici (R-N.M.) called Hollings proposal "more of the same" kind of fiscal policy that Reagan and the Congress ar trying to change.
"For 25 years, we believed the most important function of the federal government was to tax our people and devise new programs to spend the revenues," Domenici said. "For 25 years, we were so concerned about spending the blessings that we forgot where the blessings came from."
The tax vote came as the Republican-controlled Senate brushed aside other Democratic proposals to balance the 1982 budget -- or at least reduce the deficit -- as it continued to march in lock step with Reagan's economic priorities.
For the outnumbered Democrats, it was largely a day of trying to out-Reagan Reagan in a variety of ways, ranging from cutting programs that he had left basically intact to beating him to the punch in arriving at a balanced budget.
But, plagued with disarray within their own ranks, they wre unable to prevent lopsided votes to sustain Reagan's spending and tax-cut proposals as the Senate made its way slowly through the third day of debate on a preliminary budget resolution for fiscal 1982.
In the end, possibly by tonight, the Senate is expected to follow in the footsteps of the House and give Reagan the spending blueprint he wants: increased defense spending, bug cutbacks in social programs and a three-year, across-the-board tax cut. The Democratic-run House approved such a budget last week, virtually assuring its final passage.
In what amounted to the most audacious attempt to beat Reagan on his own fiscally conservative turf, Sen. William Proxmire (D-Wis.) proposed to cut $48.8 billion from the Senate Budget Committee's $699.1 billion draft of the Reagan budget, thereby eliminating its entire deficit.
Despite the customary appeal of a balanced budget on Capitol Hill, the proposal wasn't even taken seriously. It lost, 81 to 13, after Domenici complained that Proxmire's proposal didn't even spell out where the cuts would be made.
Passage of such an amendment, Domenici said impatiently, would make "utter shambles of all the work we do."
Hollings joined Domenici in protesting that "this is no more than a charade."
Sen. Howard M. Metzenbaum (D-Ohio) came a little closer, losing 52 to 39 in an effort to cut $200 million from water projects and use the money to reduce the deficit.
"Everything else has been cut," protested Metzenbaum. "What makes water projects holier than thou?"
With senators from both sides of the aisle disputing his figures, Metzenbaum contended that the Budget Committee cut only $40 million fron $2.1 billion in water projects for next year. He also accused the committee, with its large number of members from the South and the West, of "bias" toward the water-project needs of those regions and against the needs of the industrialized Northeast and Midwest.
Domenici contended that the committee proposed "significant" cuts in water projects, amounting to $600 million through 1984. The committee, he insisted, was "as frugal in this function [spending area] as almost every other."
Also rejected, by a vote of 55 to 30, was a proposal from Sen. Daniel P. Moynihan (D-N.Y.) to cut water projects by $200 million and use the money for college loans and mass transit, two areas for which Reagan has proposed big and controversial cuts.
To no avail, Sen. Bill Bradley (D-N.J.) proposed a "sense of Congress" appeal to the Reagan administration to explain -- by Oct. 1 -- how it expects its tax-cut and spending plans, including its large proposed increase in defense spending, to affect inflation, interest rates and unemployment. Over protests from Armed Services Committee Chairman John G. Tower (R-Tex.) that the proposal amounted to "fluff," it was defeated, 69 to 26.