A single large tax increase, possibly an across-the-board energy tax or a profits tax on deregulated natural gas, is a more likely alternative to help ease the federal budget deficit than a package of many small tax increases, the chairman of the Senate Finance Committee said yesterday.
But Chairman Robert J. Dole (R-Kan.) said he is becoming more convinced that there will be no tax increases at all in fiscal 1982, which began Oct. 1. And he suggested that Congress, under increasing constituent pressure not to cut social programs further, might put off financing the MX missile and B1 bomber in order to reduce federal spending.
Meanwhile, another sign of mounting deficit difficulties came yesterday from the Democratic-controlled House Budget Committee, whose staff is projecting a cumulative three-year deficit by 1984 of $228.1 billion if President Reagan's latest program is enacted--and $342.9 billion if it isn't. The figures are substantially higher than administration projections, which are based on more optimistic assumptions about the economy's performance.
Dole appeared to give qualified support several days ago to legislation proposed by Senate Republicans that would require about $60 billion in tax increases over the next three years. Under consideration were new limits on deductions for home mortgage interest and medical expenses, elimination of long-standing tax breaks for the timber, coal and iron ore industries and sharply increased excise taxes on gasoline, cigarettes, alcoholic beverages and telephone use.
But in an appearance yesterday on "Meet the Press" (NBC, WRC), the Finance Committee chairman seemed to back away from those proposals, saying he sensed an "erosion of courage on Capitol Hill."
"The more I've studied the problem the more I'm convinced there may not be any tax increases in 1982," Dole said. ""We've been looking at a long range of taxes--excise taxes, luxury taxes, energy taxes--and none are very popular."
Congress probably will push back any increases to 1983 and 1984, after the 1982 congressional elections, with hopes of still balancing the budget by 1984, Dole said. Instead of a "laundry list" of tax increases, Dole suggested one large revenue generator, such as an import fee, a so-called "windfall" profits tax on natural gas or a levy on all energy sources based on the number of British thermal units (BTUs) of energy produced.
"If we're going to do something," Dole said, "we ought to find one or two big items and try to rally our troops to support one or two big increases, maybe an energy tax or some other large item, rather than trying to pick of 19, 20, 25 different areas, because you're going to have every special interest group in America descending on the Finance Committee in the Senate and the House Ways and Means Committee."
The president, however, is on record as being opposed to a windfall profits tax on natural gas. In a note to Rep. Glenn English (D-Okla.) last July, when the lobbying of House members to win support for the administration's spending cuts was at its peak, Reagan said he would veto "with pleasure" any bill calling for such a tax.
Dole said that his committee is "still looking at budget cuts in entitlement programs and others," but said he foresaw little additional change in the food stamp or school lunch programs. "I think there's a limit on how much we attack social programs," he said.
But putting off the $41 billion MX missile and $28 billion B1 defense programs "is a possibility," Dole said, "particularly, I think, on the B1."
He noted that Sen. John G. Tower (R-Tex.), who chairs the Senate Armed Services Committee, "has a different view," but said other members of Congress who have supported the B1 development wonder "can we now afford that expense when we're looking at more cuts in social programs or increasing taxes? And those of us who have the responsibility are probably taking a little closer look at some of the defense spending, whether it's the MX or B1 bomber."
A White House spokesman said yesterday that Reagan hopes the Congress will proceed with the MX missile and B1 bomber plans as he presented them. The president also hopes Congress will support his $3 billion "revenue enhancement" tax program proposed in September, the spokesman said, "but we are in consultation on this."
Meanwhile, Treasury Secretary Donald T. Regan, speaking on "Face the Nation" (CBS, WDVM), said Reagan should veto any bill that exceeds his budget requests. Regan wouldn't specify whether he wanted a veto of the farm bill or Interior Department budget. "I am suggesting it would be appropriate for the president to veto one or two of these bills as they come along in order to indicate to the Congress the seriousness with which he views their overruns."
In addition, the administration may be forced to support tax increases if Congress doesn't make the appropriate spending cuts to provide a balanced budget in 1984, Regan said. He said it is still possible to have a balanced budget in 1984, "but it's not probable unless the Congress acts."
Using Reagan's economic assumptions, the three-year deficit would be $180.9 billion if Congress fails to approve the president's program, according to the House Budget Committee. If the program is approved, the deficits for 1982 and 1983 would total $66.1 billion and the budget would be balanced in 1984.
But using its own assumptions, the Budget Committee contends that the 1984 budget would be $74.4 billion in the red even if Reagan's program is approved.
Information made available by a Budget Committee source did not include the economic assumptions upon which the committee staff based its projections, but an official said they anticipate lower economic growth and higher interest rates than the administration projects.