Chairman Dan Rostenkowski (D-Ill.) of the House Ways and Means Committee, yesterday denounced as regressive excise tax increases on tobacco and alcohol that Republicans are contemplating as a method of reducing the deficit.
Rostenkowski was one of a number of critics who spoke out against the Reagan economic program yesterday at three different forums here, including a seminar sponsored by the American Enterprise Institute and the first news conference of a new Democratic think tank. Details, Page D6
Appearing at the National Press Club, Rostenkowski said the excise tax increases would amount to "a most regressive" consumer tax which would be only minimally useful in the effort "to get the budget house back in order."
He placed responsibility for projected deficits exceeding $100 billion in coming years on the $749 billion tax cut Reagan pushed through Congress last year, indicating he thinks some reduction of this would be in order.
"The president must recognize that future deficits must be fought with major revisions in tax policy -- that tomorrow's deficits have largely been created by excessive tax cuts . . . The question now is whether this president is wise enough --and tall enough--to concede that some of his policies were roughly conceived and in need of alteration."
Rostekowski warned that deeper cuts in social programs as the principle means of reducing the deficit will "begin to tear at the very heart of the American way . . . violating the basic contract between a central government and the people who pay for it."
While opposing the excise tax increases on tobacco and alcohol, Rostenkowski said he could support a 4-cent-a-gallon increase in the gasoline tax, but that the money would probably be allocated to finance repair of the interstate highway system.
At a symposium sponsored by the American Enterprise Institute, budget analysts viewing Reagan's first year from different slants joined in predicting a much tougher time for his economic program in Congress this year.
Two of them, AEI economist Rudolph Penner and Allen Schick, budget expert for the Congressional Research Service, suggested that the impact of Reagan's 1981 budget cuts may have been exaggerated. "The Great Society is still alive and very well," with many of its major initiatives having survived with relatively minor scratches, said AEI's Penner.
Stuart Eizenstat, domestic adviser to former President Carter, described Reagan's initiatives as marking the first significant "pulling back" of federal government responsibilities since the Roosevelt administration but agreed with his colleagues that last year's victories would be hard to duplicate.
Whereas Carter "overloaded" Congress' circuits with many proposals at once, Eizenstat said Reagan succeeded by setting a relatively narrow agenda focused on budget and tax cuts. But this advantage is likely to fade under pressure for consideration of controversial social issues and items such as speed-up of natural gas deregulation, he added. Moreover, failure of the economy to respond as quickly as hoped, coupled with campaign pressures and a negative reaction to Reagan's short-circuiting of normal congressional procedures, may make Congress less less willing to go along a second time, said Eizenstat.
The panelists also saw mounting deficits and the difficulty of containing them as a threat to Reagan's winning streak on Capitol Hill. For Republicans and conservative Democrats, the acceptance of big deficits is "the political equivalent of a sex-change operation," noted Penner.
As for the extent of Reagan's 1981 budget cuts, Schick suggested that one-third of them may have been illusory, because the cuts were measured not against actual spending but against what programs would cost in a future year with adjustment for inflation and other changes.
While Republicans decried such an approach in earlier years, they accepted it under Reagan because they wanted his program to look good. "The Republicans got more savings and the Democrats saved more programs, a happy combination for political institutions faced with difficult choices," said Schick in a paper prepared for his talk.