House Republican leaders, jarred by staggering budget deficit projections into a reappraisal of their opposition to tax increases, are urging the Reagan administration to consider some major revenue-raising measures to keep deficits below $100 billion over the next few years.
Among their suggestions are a tax on the proceeds from further decontrol of natural gas prices, a tightening of the minimum income tax, repeal of the tax provision approved last year allowing corporations to sell their tax breaks and a tax on imported oil, according to several of the leaders.
They reportedly have mixed feelings about proposals by presidential aides to increase federal excise taxes on alcohol, tobacco and gasoline. Some leaders fear that may create "more pain than revenue," as one Republican put it, and hit especially hard at lower-income people.
"Look, we're just saying you ought to consider it some kind of tax increase . . . . When you're facing deficits like that, you've got to at least look at all the alternatives," said Rep. Trent Lott (R-Miss.), the House minority whip, in assessing the views of Republican leaders as they prepare to meet with President Reagan today on budget preparations.
Lott was among a group of leading House Republicans, including Minority Leader Robert H. Michel (Ill.), who met Thursday with Office of Management and Budget Director David A. Stockman. According to three of the participants, they came away with the conclusion that raising taxes may be the only way to avoid politically intolerable deficits for the foreseeable future.
Some were also described as favoring a slow-down in the huge planned increase in defense spending, along with continued cutbacks in domestic spending, especially for basic benefit entitlement programs.
But, as one of the leaders described the prevailing view, this may not be enough.
"We'd like to avoid tax increases if at all possible, but it's not possible any longer if we're going to reduce deficits" in future years, he said, adding that "the desire to avoid tax increases is less than the desire to reduce deficits."
This view dovetails with the position of Senate Finance Committee Chairman Robert J. Dole (R-Kan.), who told reporters last week that he believes taxes have to be raised, although President Reagan, he said, must make the first move if Congress is to go along.
The leading hold-out now appears to be Rep. Jack Kemp (R-N.Y.), who reiterated on "Meet the Press" (NBC, WRC) program yesterday that he opposes tax increases to keep down future deficits, which he contended will not be as large as currently projected. Instead of raising taxes or cutting more social programs for the poor, Kemp, who helped inspire Reagan's "supply side" tax cuts last summer, suggested reducing some of the "many corporate subsidies" in the budget.
While the other House GOP leaders stopped short of publicly calling for tax increases to contain the deficit, their willingness to consider revenue measures is significant in light of their resistance last year even to Reagan's modest package of $3 billion in "revenue enhancements" for fiscal 1982. Last fall, when deficit projections began soaring, Senate Republican leaders pushed for at least that much in tax increases but couldn't win over their House colleagues.
Eventually the administration postponed any revenue-raising action until this year. Reagan has repeatedly said he doesn't want to raise taxes, although his economic advisers are urging increased excise levies that could raise about $10 billion for fiscal 1983.
Aides reported Friday that the president was agreeing to these proposals, along with a shift in major responsibility for highways, welfare and possibly education to the states.
As he returned to the White House from Camp David yesterday, however, Reagan said: "No decision has been made except that I can tell you this: We're going to do nothing that will interfere with the incentive tax program that has been adopted to increase productivity"--a reference to the individual and corporate tax cuts approved last summer by Congress.
The House Republican leaders who were interviewed yesterday said they, too, would oppose any rollback of the 1981 tax cuts, except the provision for sale of corporate tax breaks.
But House Budget Committee Chairman James R. Jones (D-Okla.) said yesterday on "Face the Nation" (CBS, WDVM) that the third year of the individual income tax cut, due in mid-1983, should probably be postponed. Jones also criticized what he called the "regressive" nature of the Reagan aides' proposals for increased taxes on gasoline, tobacco and alcohol.
"If they're going to have excise taxes, they should place them on luxury items also--luxury cars, luxury coats, those kinds of things," he said.
In discussing the possibility of revenue increases, Lott, the second-ranking Republican leader in the House, described himself as one of the "two or three last holdouts" against tax increases but said he now believes that "possibly we have to do something in that area."
Tax increases in the range of $15 billion to $30 billion, combined with spending cuts, would help meet the goal of a 1983 deficit that is lower than the 1982 deficit, although doing this will be "awfully hard," Lott said.
The administration is hoping to keep the 1982 deficit under $100 billion, although it is still all but certain to be well above the record, the $58 billion deficit for fiscal 1981.
At one point the administration projected a deficit of about $150 billion for 1983 given no further budget changes, although administration officials now say it is likely to be somewhat lower. Lott said he would like the keep the 1983 deficit under $85 billion.
Another Republican leader at Thursday's meeting with Stockman said the deficit projections are so alarming that he will have to tell Reagan that Congress may not even be able to approve a budget resolution. "No Republican is going to want to sign onto a deficit of that size--double what we projected last fall," he said. "The whole budget process could fall apart."