President Reagan was reported yesterday by congressional sources to be leaning against proposing major new taxes to reduce budget deficits. But they said that Reagan, who spent the weekend at Camp David thinking about it, had not yet made his final decision on the issue.
Senate Majority Leader Howard H. Baker Jr. (R-Tenn.) told interviewers on "Meet the Press" (NBC, WRC) that he had proposed luxury taxes and some tax loophole-closing to Reagan but gathered from a telephone conversation with the president earlier in the day that Reagan was "leaning against" his proposals.
An aide to Baker said the senator had also gotten the impression from the conversation that Reagan was "not inclined to recommend any major new taxes," including excise tax increases recommended by his senior advisers.
But Baker and the aide emphasized that Reagan had not made a final decision on whether to recommend tax increases in his State of the Union message tomorrow night or in his 1983 budget that will be submitted to Congress early next month.
Reagan had been reported last week to have accepted about $15 billion in excise tax increases proposed by his advisers, but the White House said the issue was still undecided by the president as he took off Friday for Camp David.
Returning to the White House yesterday afternoon, Reagan told reporters, "Tune in Tuesday night."
In the interview, Baker said he had urged Reagan to consider luxury taxes on nonessential items, a minimum tax on corporations and the closing of some tax "loopholes" such as the buying and selling of corporate tax breaks that Congress approved last year as part of the summer tax-cut bill. Some of these proposals have also been advanced by other congressional Republican leaders.
"I am not at all persuaded that he Reagan is going to take that advice," Baker said. "My impression is he may be leaning against that."
Baker reinforced expectations that Reagan will expand his "New Federalism" theme in his Tuesday night speech to include transfer of several major programs to state and local governments--programs that have been reported by other sources to include Aid to Families with Dependent Children and food stamps. In return, the federal government would assume the full burden of the Medicaid program, which it now splits with the states.
"I think the president may make suggestions on how we can all float programs from the federal level to the state and local levels, and how we can provide the revenue . . . to see that those services are still performed," Baker said.
An administration spokesman confirmed yesterday that, at least as of earlier in the week, Reagan was planning to call for increases in federal excise taxes in the short run, but then a total phase-out of these taxes by 1990. The idea is this would eventually give the states room to raise excise taxes on their own in order to finance the programs that the federal government would be turning over to them. It was not clear whether a phase-out of federal excise taxes would still be proposed if Reagan does not recommend excise tax increases.
A congressional source said one plan under study by the president calls for splitting the revenues from the current 4 cent-a-gallon gasoline tax with the states, with no increase planned in the levy itself. This "turnback" would compensate the states for taking over some highway programs.
In the interview, Baker also said he felt that Reagan and the Republican Party faced a "major problem" in lack of confidence by blacks and said he would work to help correct the matter in Congress.
Baker said he would push for a 10-year extension of the existing Voting Rights Act or "some variation" of a stronger version of the law approved last year by the House. But he said he did not favor enactment of the House version without change, which many other civil rights advocates in the Senate are proposing.
Baker also conceded that the administration's turnabout on the issue of tax exemptions for racially discriminatory private schools was a "foul-up" and said he will push for early enactment of legislation to ban such exemptions. He predicted that the legislation will pass after a "big fight."