A $5.1 billion jobs bill continued last night to be held hostage to force a Senate vote on repeal of tax withholding for interest and dividends, as feuding Republicans failed once again to reach a compromise.
Before adjourning late last night the Senate, after wading through a long list of amendments to the measure, was stalled just a few steps short of final passage by the withholding impasse, which Majority Leader Howard H. Baker Jr. (R-Tenn.) tried in vain to break through negotiations with House Democratic leaders and his own GOP combatants.
First he tried--and failed--to get House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) and Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) to bail out the Senate by agreeing to provide another legislative vehicle for the withholding repealer after Congress returns from its Easter recess.
Then, in an unusual personal negotiating bid from the Senate floor, he got Senate Finance Committee Chairman Robert J. Dole (R-Kan.) to agree, in spite of constitutional requirements that revenue bills originate in the House, to provide a bill in mid-April that could accommodate a vote on withholding.
But Sen. Robert W. Kasten Jr. (R-Wis.), leader of the withholding repeal drive, refused to go along, arguing for an immediate vote on withholding in connection with the jobs bill. Among other things, he complained that a Senate-originated tax bill "would not make it through the process."
Repeal of withholding, under which 10 percent of income from interest and dividends would be withheld for tax purposes starting July 1, has gathered a powerful head of steam in Congress under presure from the banking industry. But Dole adamantly opposes repeal, as do House Democratic leaders, and President Reagan has vowed to veto any legislation that includes repeal.
"We've come a long, long way . . . . The only trouble is that the target keeps receding," observed Baker in a somewhat tart reference to Kasten's conditions for a procedural compromise on the issue. "I don't think he Kasten wants to be accommodating," complained Dole.
This left the Senate facing two cloture votes to cut off debate today, with the outcome uncertain and with the Senate nearing a deadline.
The reason is that the jobs bill is tied to legislation necessary to continue payment of unemployment benefits in 27 states and the District of Columbia, which the Labor Department now says will run out on Friday.
Meanwhile, the White House raised a veiled veto threat in light of the fact that the bill, as currently amended by the Republican-controlled Senate, exceeds in size the $4.9 billion jobs bill passed by the House.
Reagan had given a qualified blessing to the House version of the bill, but indicated he was relying on the Senate to pare the measure, which it has not done.