President Reagan, confronted with a seething rebellion in conservative ranks over his support for a three-year, $98.9 billion tax increase, sought to quell the revolt with persuasion and blunt personal admonition yesterday.
He summoned to the Oval Office two of his oldest advisers, economist and former White House domestic affairs chief Martin Anderson, and former White House political director Lyn Nofziger.
They were among two dozen conservatives who attended an "urgent conference" Wednesday night dedicated to throwing a wrench into the tax bill Reagan is trying to get through Congress.
Administration sources said Reagan was firm and direct in his insistence on backing the tax increase and, at his midday meeting, asked Nofziger and Anderson not to undermine his efforts.
Neither Nofziger, who helped launch Reagan into politics, nor Anderson, who helped refine Reagan's conservative campaigns, could be reached for comment yesterday.
But they were among 24 conservatives who have advanced Reagan's supply-side economic agenda and who issued a statement yesterday pledging "our best efforts to reduce spending and to oppose the tax bill now before Congress." Their vow came on a day that Reagan strengthened his personal imprint on the tax legislation, which is in House-Senate conference, in hopes of staunching the discontent rippling through Republican ranks in the House.
"Personally, I had to swallow very hard," the president said of his commitment to the tax increase bill in a handwritten letter to conservative columnist John D. Lofton Jr. "I believe in 'supply-side' and that tax increases slow the recovery. I am also determined that we haven't had all the spending or tax cuts we're going to get."
While Reagan described the tax increase as "distasteful," he called it "the price we had to pay" to get spending reductions.
In an attempt to break down opposition to the tax bill in the largest state delegations, Reagan called to the White House three consecutive waves of GOP House members from California, New York and the New England states.
But many of the defiant members of Congress were unmoved by his appeals that the tax increase is needed to get passage of companion spending cuts and signal the financial markets that deficits will not balloon further out of control.
"The taxes must come exclusively out of the pockets of hard-working Americans," said Rep. Philip M. Crane, (R-Ill.) after the session. "This tax bill is an abomination. It is bad economic medicine. I don't think it will pass the House."
Echoing the central complaints of other House Republicans, Rep. John H. Rousselot (R-Calif.) said after yesterday's presidential lobbying that the tax bill circumvented the constitutional requirement that all revenue-raising measures originate in the House.
The tax bill originated in the Senate, primarily as the creation of Sen. Robert J. Dole (R-Kan.), chairman of the Finance Committee.
"The House has not done its part in holding down spending," Rousselot complained. Only this week, he said, the House failed to trim pensions for federal employes as called for in the congressional budget resolution that embraces the tax increase.
"I don't think we should vote on the tax increase until we get the spending cuts," said Rep. William E. Dannemeyer (R-Calif.).
House Republican leaders hope to do exactly that as part of their strategy to win over lawmakers wary of the election-year tax increase. They want to bring up as many of the spending cuts under the budget reconciliation resolution as possible before taking up the tax increase bill in the hope of persuading skeptical members to support it.
One other aspect of the strategy is to attach to the tax legislation provisions that would maintain extended unemployment benefits in 25 states after the scheduled cutoff Sept. 25 in a bid for Frost Belt GOP support.
While Reagan was making the case for the tax bill, the group of 24 conservatives, including Anderson and Nofziger, who held an "urgent conference" Wednesday night in an effort to stop the legislation, denounced it in a short statement.
"In the present weak economic climate, and during a time in which the Congress refuses to support the spending cuts required by the budget resolution, we friends and supporters of Ronald Reagan oppose the tax increase . . . . We believe that to restore the health of the economy and put Americans back to work, America should follow a course against high taxes and high federal spending. We pledge our best efforts to reduce spending and to oppose the tax increase now before Congress."
The signatories, including former Reagan Treasury Department officials Norman Ture and Paul Craig Roberts and several conservative writers and academics, were described as the "intellectual core of the original Reagan supporters" by Rep. Newt Gingrich (R-Ga.). He said the tax battle would be the "opening round of a fight over the soul and future of the Republican Party."
Among those who endorsed the statement was Bill Timmons, the political consultant who had worked on the Ford and Reagan campaigns. Sources said Timmons was not invited to the Oval Office yesterday, but received a message similar to the one given Anderson and Nofziger in a telephone call from White House chief of staff James A. Baker III.
Timmons attended the Wednesday night meeting on Capitol Hill, where the conservatives laid plans to bury the tax increase even as Reagan was promoting it.
At the White House yesterday, efforts were being made to smooth over the conservative rebellion and blunt the possibility that the tax increase could become a campaign weapon against Reagan.
Deputy White House press secretary Larry Speakes claimed the tax boost was not the largest in American history, as it has been labeled. Nor, he said, would it fall heaviest on the working class that was instrumental in electing Reagan.
"The bill does not raise taxes on working people," Speakes said when asked about sharply higher taxes for cigarettes and alcohol in the Senate-passed version.
Democrats were staying out of the Republican fight. Asked about the lack of GOP unity on the tax bill, House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) said, "I think they're having one hell of a brawl."
While Reagan has been refraining from public expressions of support for the tax increase bill, he offered his most complete defense of it in a July 30 handwritten letter to Lofton, a columnist for The Washington Times and contributing editor of the magazine Conservative Digest, which carried a cover story on Reagan this month: "Has Reagan Deserted the Conservatives?"
Reagan said he was supporting the tax increase only because it would bring with it the spending cuts he wanted. ". . . I could not stand by and see the further cuts in spending go down the drain when the price, distasteful as it is, gave us the biggest share of what we were seeking."
Also yesterday, several House members announced plans to sue the Senate for violating the Constitution by writing the tax increase bill first.