President Reagan yesterday delayed yet again a decision on whether to propose higher excise taxes in his fiscal 1983 budget, due to be sent to Congress on Feb. 8, administration officials said.
Reagan "does not plan to lock in on several important issues" until he has had further consultations, White House communications director David Gergen said yesterday, adding that the president may not make up his mind on taxes and the size of the 1983 deficit until just before next Tuesday's State of the Union address.
Some Reagan aides had thought on Wednesday that the president approved temporary increases in excise taxes on cigarettes, liquor, wine and "luxury" items, with part of the money to be returned to the states as part of a plan under which the states would also take on some current federal spending programs. But others said yesterday they believed the president had stopped short of final approval even then for the plan, which would raise about $15 billion in additional revenues to bring the 1983 deficit into the region of $75 billion. Reagan has already approved $31 billion in new spending cuts for 1983, sources said.
In any case, by yesterday morning the president had decided to consider the tax and deficit issue for a few more days; sources said he told officials to try to come up with other ways of narrowing the deficit.
One tax increase, on gasoline, has definitely been ruled out, congressional sources said yesterday, and Reagan has also decided not to raise taxes on beer, even if other alcohol taxes are increased, administration sources said. House Republican leader Robert Michel (Ill.) has strongly opposed raising taxes on beer, which he said would hit the working man. Reports that beer alone would be excluded from new alcohol taxes brought protests yesterday from the distilled spirits industry.
The president has repeatedly emphasized his great reluctance to raise taxes, despite unanimous agreement among his advisers that additional revenues are needed to help narrow the federal budget deficit. It may help him politically to appear the lone holdout against unpopular new taxes, although some congressional sources have also warned that without strong presidential backing Congress will not approve higher taxes in this year of recession and upcoming elections.
A group of businessmen meeting with the president yesterday morning argued strongly against tax increases, and may have influenced the president, an official said. The White House requested the meeting between Reagan and the president and chief economist of the Chamber of Commerce and three chief executive officers, according to one of those present. The businessmen met with senior White House aides before and after seeing the president.
Additional excise taxes were planned to be linked with a new "federalism" policy which the president intends to outline in his State of the Union address, sources said. This would involve, in part, giving the states full responsibility for the aid to families with dependent children and other welfare programs, while the federal government took over the rapidly growing Medicaid program.
The bulk of these changes was planned for fiscal 1984, although the new revenues were to be raised from the beginning of 1983, sources said. The proposed additional excise taxes to be turned back to the states eventually would be phased out, sources said.
Asked whether it would be possible to go ahead with the proposals for returning responsibilities for spending programs back to the states without higher excise taxes, one official said yesterday, "maybe . . . but it would be a different plan."
In a related development, Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) said he is opposed to lumping all of Reagan's spending cuts and tax proposals into one omnibus "reconciliation" bill as was done last year, although he acknowledged this may yet prove necessary in the end. Critics have complained that the omnibus approach distorts usual congressional procedures.