The White House turned up the political heat on taxes yesterday, sending House Democratic leaders a message that the time for compromise is slipping away and that President Reagan can also win passage of a tax cut bill by forging an alliance with conservative Democrats.
On a separate issue, the administration also served notice after a Cabinet meeting that would oppose a plan by federal regulators to provide new financial assistance to the nation's ailing savings and loan associations. [Details on Page D9]
While holding open the door for a tax compromise with House Ways and Means Committee Democrats who rebuffed a Reagan-approved compromise to warning that Reagan could choose to fight on the House floor with the support of southern Democrats who last month defied their party leadership to back Reagan's budget-cut proposals.
Treasury Secretary Donald T. Regan, White House chief of staff James A. Baker III and White House chief of congressional liaison Max Freidersdorf met at the White House yesterday with three of the conservative Democrats who went against their leaders on the budget and appear ready to help Reagan again.
White House deputy press secretary Larry Speakes said there is no deadline for working out a compromise, but other White House officials said they would only wait until Monday or Tuesday for a conciliatory step by the White House Monday in another attempt to find common ground. House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.), Majority Leader Jim Wright (D-Tex.), Ways and Means Chairman Dan Rostenkowski (D-Ill.), Senate Minority Leader Robert C. Byrd (D-W. Va.) and Sen. Russell B. Long (D-La.) were invited to talk with the president, Baker told reporters.
The president wants a 30 percent tax cut spread over three years, with the same percentage cut for all income groups. He says such a cut is necessary to revive the economy. The Democrats have so far held out for a one-year cut, saying more would be inflationary, and have demanded that the bill be tilted more toward middle-income groups.
"It's the president's view that we're right at the focal point of what the election in November was all about," Speakes told reporters at the White House. "We think the American people are demanding this." The tax cut, he added, "is the essential link in the chain" of economic measures put forward by the president.
Any move to pass a tax cut without cooperation from the Democratic leadership would depend on the Conservative Democratic Forum organized by Rep. Charles Stenholm (D-Tex.).
Stenholm and the two other conservative Texas Democrats, Phil Gramm and Kent Hance, who went to the White House yesterday expressed disappointment that two weeks of talk have failed to build a compromise close to the tax plan that conservative Democrats and Senate Finance Committee Chairman Robert J. Dole (R-Kan.) favor and the president has indicated he will support.
This plan calls for a 5 percent tax cut this October followed by 10 percent reductions in July of 1982 and 1983. Reagan's election campaign pledge and original proposal was for a 10 percent cut in each of the next three years.
Gramm said support is building around the 25 percent, three-year cut.He said he still hopes there will be a compromise, but added:
"If we have to fight it out, we will, and I think we can do it successfully."
That fight would be on the House floor, since without a compromise it is unlikely that a tax cut bill favored by Reagan would be voted out of the Ways and Means Committee.
At the White House, Speakes said that should a compromise not be reached, the administration is prepared to move forward with the same sort of "educational campaign" that brought Reagan 63 Democratic votes in the House on budget-cutting and a comfortable 253 to 176 victory.
White House officials appeared confident that they could win again in the House despite predictions that it will be harder to round up Democratic votes in a confrontation with the leadership on the tax cut question.
Gramm dismissed this argument, however, saying that as the time for a vote nears the consensus will build around the kind of program the president wants.
Some Democrats also want a clear vote on the tax cut unconfused by compromise. If the tax cuts are approved and do not bring the economic benefits that Reagan predicts, the Democrats who opposed Reagan will be able to tell 1982 voters that they tried to vote the cuts down.