Senate Finance Committee Chairman Robert J. Dole (R-Kan.), after talking to administration officials yesterday, said it was his understanding President Reagan would propose no excise tax increases in his State of the Union message tonight.
Instead, Dole said, the president would recommend turning back to the states some revenues from existing federal excise taxes, as well as a portion of the so-called windfall profits tax on domestically produced crude oil.
A revenue turnback would, by itself, add to the likely fiscal 1983 budget deficit. But according to Dole and others in Congress, it will be accompanied by proposals to have the states take over some federal spending programs.
In addition, Dole said he thought the president will endorse a new minimum income tax on corporations that would raise about $2.5 billion next fiscal year.
Reagan may also propose other miscellaneous tax increases; Dole said he is looking at ways to move up tax revenues from dividend and interest income. One such proposal in the past has been to subject dividends and interest to withholding.
Reagan's speech to a joint session of Congress at 9 tonight will be nationally televised.
Reagan's advisers had urged him for weeks to increase such taxes as those on gasoline, alcohol and cigarettes to reduce the 1983 and 1984 deficits, which some experts have said will otherwise exceed $150 billion. Late last week it was reported the president had reluctantly decided to go along with this, but on Friday he seemed to reverse himself.
Dole's report yesterday was one of several that the president was sticking to his anti-tax position. The senator would not name the officials he talked to inside the administration. He said he could not be sure how much money all of Reagan's tax increase proposals would raise, but said it could be in the range of $8 billion in 1983 and $15 billion in 1984.
Dole is one of those who have urged the president to propose tax increases, saying Congress will not raise revenues on its own. "Triple-digit deficits in fiscal years 1983 and 1984 are just not acceptable economically or politically," Dole said last week. He was proposing larger increases than Reagan apparently is.
Reagan completed a draft of the State of the Union over the weekend at Camp David and circulated it to his top advisers yesterday morning. He then worked alone with a yellow pad to put the last touches on the speech, White House deputy press secretary Larry Speakes said.
Speakes said Reagan was working to cut his speech to between 30 and 40 minutes and would read it aloud to himself to check its length.
The State of the Union will deal mostly with domestic affairs: the economy, the budget and Reagan's plans to realign the responsibilities of the federal government and the states.
A central feature of this will be a trade in which the government will relieve the states of all or most of their share of the cost of Medicaid. The states in turn would have to pick up the full cost of Aid to Families with Dependent Children, which they now split with the federal government, and food stamps, which the federal government now pays entirely. Whether states would be free to drop these two programs if they did not want to bear the costs has not been made clear.
Meanwhile, copies of the president's forthcoming Department of Energy budget for fiscal 1983, circulating yesterday, showed that nuclear weapons production will take $5.5 billion next year, or 71 percent of all spending for energy programs. The overall budget is $7.74 billion, down 18 percent from 1982 levels, and assumes that Congress will go along with moving bomb-making to the Department of Commerce, the Strategic Petroleum Reserve to the Department of Interior and so on, which is by no means guaranteed.
The budget drops 94 percent of DOE's conservation programs, leaving grants to the states down from last year's $240 million to $2.5 million and research into conservation techniques at $19.3 million. Research aid to the cleanup at Three Mile Island receives $27 million. Solar programs decline by 72 percent, down to $72.9 million.