Members of Congress in both parties said yesterday that the Treasury Department's new tax-simplification plan would go nowhere without President Reagan's explicit and vigorous support, but the president carefully kept aloof from the proposal.
"It would take the president's support to really get the push it needs to get through Congress," said House Minority Leader Robert H. Michel (R-Ill.) after a briefing on the proposal from Treasury Secretary Donald T. Regan.
"If this is just Don Regan's tax plan, it is the biggest trial balloon since the Hindenburg," said House Budget Committee Chairman James R. Jones (D-Okla.). "What we must have is Ronald Reagan's tax plan."
But the president told reporters he was "not ready to tell anyone" his proposals for tax simplification "because no decisions have been made."
White House spokesman Larry Speakes said the president "has not expressed a view" on a central element of the Treasury plan -- a cut in taxes for individuals at the expense of corporations.
White House officials also observed that the Treasury plan would hit some industries, such as real estate and oil, that are among Reagan's natural political constituencies and are well-entrenched on Capitol Hill.
In a written statement, the president said that "at first glance" the Regan plan was "simpler and fairer," and praised one aspect of it. "It is . . . something that I insisted upon: a tax simplification and not a tax increase in disguise," he said. Reagan is expected to propose a tax-simplification plan in his January State of the Union speech.
Speakes said "the election was fought and won" on Reagan's promise to cut spending and not raise taxes. While Reagan remains committed to the idea of tax simplification and hopes to get a program enacted in 1985, Speakes said the fiscal 1986 budget appeared to be a more urgent matter.
Another White House official put it bluntly: "I think a lot of people around here are going to forget about tax simplification around here in a few days and focus on the budget."
Congressional leaders also stressed the importance of dealing with the deficit. The Treasury tax proposal is designed to be "revenue-neutral," meaning it would not add to the government's revenues and thus would not help reduce defi- cits that are estimated to be in the $200 billion range for the next few years.
Senate Finance Committee Chairman Robert J. Dole said tax reform "is a vital issue" but "the deficit is probably our most urgent priority."
"Far overshadowing tax reform is the deficit," said House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.). "Tax reform is a noble cause. Deficit reduction is a demand."
"It's clearly going to be difficult to push through something that controversial," Rep. Dick Cheney (R-Wyo.), chairman of the Republican Policy Committee, said of the administration proposal. "People are already lining up to protect their particular loopholes. One of the things I would worry about is that members would go home between now and the next session and get locked in on protecting various tax preferences. They're likely to be in concrete when we go back into session."
Privately, congressional leaders in both parties were more dubious about the proposal. "Some of us wonder why the administration is doing it at all," said one Republican who was briefed by Regan yesterday and asked not to be identified.
White House officials also said privately that they believe the Treasury proposal was put together in a political vacuum and would not fare well in Congress. The officials said it was apparent that dozens of special-interest groups, ranging from capital-intensive heavy industries to colleges and universities that benefit from breaks in the tax code, would soon be lining up against the Regan plan.
"If this is a battle between a few tax-reform groups in Washington and the special interests, the special interests are going to win," said Sen. Bill Bradley (D-N.J.), co-author with Rep. Richard A. Gephardt (D-Mo.) of a major tax-simplification bill pending in Congress. "The question is really going to be whether the president will be willing to take on the special interests and propose a bill to the Congress that does lower the rates and make the system fair by closing loopholes."
Sen. John C. Danforth (R-Mo.), a Finance Committee member, said the tax-revision plan proposed by Regan will "have very tough going."
"All the tax preferences are there because they have groups supporting them," he said, adding that deficit reduction probably had a higher priority than tax simplification in the Finance Committee.
Sen. Bob Packwood, (R-Ore.), who is next in line to be chairman of the Finance Committee if Dole becomes majority leader, said Reagan should submit his proposed spending cuts to Congress first and then let tax simplification be carried along by "momentum."
White House officials said Reagan would now consult with congressional leaders on a plan; the president said in a written statement yesterday that he wants to move "in a bipartisan manner" early next year.
Regan acknowledged that major changes will be made in his proposal. "This thing was written on a word processor -- it can be changed," he said.