House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass) yesterday angrily accused Rep. Dan Rostenkowski (D-Ill.), chairman of the Ways and Means Committee, of undercutting the House Democratic leadership by signaling a willingness to leave the July 1 tax cut intact.
Backed by Majority Leader James C. Wright Jr. (D-Tex.), O'Neill charged that Rostenkowski had weakened, if not killed, the Democratic leadership's commitment to try to cap the 10 percent rate cut at $700 so that the benefits would be skewed to the working and middle class. Nonetheless, the leadership reportedly reaffirmed its support for the cap.
The accusations were made at a closed leadership meeting described as one of the bitterest in memory. In addition to complaining that Rostenkowski had unilaterally abandoned a key element of the leadership's legislative plans, O'Neill said Rostenkowski had not let anyone know in advance that he was going to annouce what amounted to a tax program.
All participants were highly sensitive about the session, refusing to discuss it on the record. One of those present said O'Neill complained that Rostenkowski made him "feel like a f------ fool....I don't appreciate it."
In a speech Tuesday before the Securities Industry Association, Roskenkowski called for repealing all tax cuts scheduled to take place after next Dec. 31, including indexation of income tax rates to the consumer price index, which is to start in 1985.
In the speech, Rostenkowski said he personally supports changes in the July 1 tax cut, but "a lack of consensus on the merits of the third year should not prevent us from moving ahead" with the rest of the proposal.
Rostenkowski reportedly contended that he had given members of the leadership adequate notice, and pointedly noted that Wright twice initiated legislative proposals, including a mandated balanced budget, without consulting others.