The Senate got over feeling sorry for itself yesterday and voted to repeal the $75 a day tax break that members of Congress voted themselves last year.
By 70 to 23, the Senate restored the system that for 27 years, from 1954 to 1981, had permitted members to take a flat $3,000 tax deduction for expenses associated with living in Washington.
Later, in defiance of a threatened presidential veto, the Senate approved, 69 to 23, an amendment adding a $5.1 billion emergency housing subsidy over five years to the supplemental appropriation bill of which the tax break repeal is a part.
Before leaving on Memorial Day recess, the Senate passed the supplemental appropriation bill by 73 to 19. The bill now goes to a conference committee with the House to iron out differences.
The action on the housing subsidy, portrayed as an anti-recession weapon, was the first rebellion by the Republican-controlled Senate since it enacted a budget resolution acceptable to President Reagan.
Introduced by Sen. Richard G. Lugar (R-Ind.), the housing measure would subsidize mortgage rates to enable moderate- and low-income families to purchase new homes.
Reagan has hinted that he may veto the entire supplemental bill because of the housing program's inflationary effect on the budget. Sen. William L. Armstrong (R-Colo.), who had filibustered against the housing subsidy, predicted that Reagan would veto the bill and that the Senate would sustain the veto.
In a closely contested floor battle, the Senate first voted, 63 to 27, to suspend its rules to allow consideration of the housing amendment. Armstrong claimed later that several who voted for the rules suspension promised to vote to sustain a presidential veto.
Echoing last week's statement by Reagan, Armstrong called the housing subsidy a "bailout" bill for the housing industry. He predicted that similar subsidies for other industries would follow.
The tax break repeal marked a decisive turnabout from the position Congress took last winter when it decided that the costs of doing business in Washington were so burdensome that members of Congress needed financial help and took it in the form of a tax break instead of a pay increase.
By some calculations, an individual member of Congress would have been able to take a tax deduction of more than $19,000 a year. Election year pressures and the registered irritation of many taxpayers--more than 34,000 letters protesting the tax break had been sent to the Internal Revenue Service--provided a good deal of the rationale for the reversal.
All senators from Maryland and Virginia voted to repeal the tax break, which was put on the books last winter as an amendment to a bill providing benefits for victims of black-lung disease.
Whether the House will go along is questionable. Senators predicted a tough battle when it goes to a conference committee with the other chamber. Some advised the Senate not to be intimidated by media critics of the tax break. Sen. Robert J. Dole (R-Kan.) said the media had distorted the issue and complained of "million-dollar television anchormen talking about our $4,000 savings."
Dole argued the issue should be left alone until after his Senate Finance Committee held hearings.
No member totally defended the tax break. Sen. John C. Stennis (D-Miss.) said it had made the Senate look bad in the eyes of the public.
The amendment restoring the old system was introduced by Sen. William Proxmire (D-Wis.).
Under the old system, members of Congress could claim a $3,000 annual tax deduction as compensation for the expense of living in Washington. Congress last year removed that ceiling and authorized a member to take a $75 deduction for each day for living expenses in Washington.
When the Senate opened debate yesterday, it was considering a compromise plan by Sen. Mack Mattingly (R-Ga.) that would have permitted unlimited deductions but required members to verify any ordinary and necessary expenses.
But Proxmire successfully substituted his repeal amendment. He claimed Mattingly's version would permit open-ended deductions and would benefit wealthier members who own larger homes and entertain more in Washington.