The Democratic-controlled House, brushing aside constitutional issues in favor of political calculations, yesterday voted 208 to 197 to accept without modification Senate-passed legislation to raise taxes by $98.5 billion over the next three years.
The measure, if enacted, would be the largest peacetime tax increase in U.S. history.
It will be subject to modification by a House-Senate conference committee, but the extraordinary action yesterday means that the House will have no direct influence on the content of the legislation.
A motion challenging the constitutionality of the House action was rejected, 228 to 170. The Constitution provides that "all bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other bills." In this case, the Senate used a minor House bill lowering taxes as a vehicle to add well over 50 provisions that would raise the $98.5 billion.
Those provisions include 10 percent withholding of dividend and interest income; reductions in medical deductions; increased cigarette and telephone taxes; reduced business tax breaks for new investments; broadened minimum taxes on the rich, and halving of the deductibility of business lunches.
In addition, the conference committee will tackle major cuts in social programs, including $3 billion from Medicare in 1983 alone.
Democrats averted direct House consideration of the measure as part of a strategy designed to ensure that in no way would the legislation be described as a "Democratic" tax bill. They voted 164 to 60 in favor of the action, while Republicans were opposed, 137 to 44.
Rep. Dan Rostenkowski (D-Ill.), chairman of the Ways and Means Committee, acknowledged that the tactic "is an unusual strategy, if not without precedent," but he argued that "any attempt to write our own version of a $98 billion tax bill will lead to political mayhem--and severely reduce odds of passage."
Rep. W. Henson Moore (R-La.) attacked the House decision, telling colleagues: "For partisan politics, for political expediency, for reasons that don't hold water, we're saying, 'Cast aside the Constitution.' " Rep. Sam M. Gibbons (D-Fla.) countered that full House consideration of the tax measure would slow the tax-writing process and "this country isn't going to survive indecision and delay."
The tactic of avoiding direct House consideration of the measure, while acceptable to the Senate Republican leadership and actively supported by the White House, angered a number of House Republicans.
Many had argued that a vote in favor meant they would be taking responsibility for a major tax increase without any chance to shape legislation that touches sensitive nerves, including business interests that have been supportive of the GOP.
In a signal of House GOP discontent, Reps. Robert S. Walker (Pa.) and Jack F. Kemp (N.Y.) rounded up at least 60 colleagues to sign a letter to President Reagan declaring that "we find it impossible to support the Senate-passed tax increase."
The letter contended: "Quietly, without debate, the Republican Party is in danger of making a U-turn back to its familiar role of tax collector for Democratic spending programs."
Rep. Trent Lott (R-Miss.), the minority whip, echoed these views, contending that "the bill that passed the Senate will have trouble on the Republican side of the House."
Lott said the conference committee could modify the measure to pick up GOP support. He said he was seeking to restore some of the business-investment tax breaks that the bill would cut and full deductibility of business lunches.