Senate Majority Leader Robert J. Dole (R-Kan.) signaled strongly yesterday that Congress will be unable to complete action on tax simplification this year.
Asked in an interview at the U.S. Chamber of Commerce if this is the year for tax reform, Dole said, "Let's be realistic. I don't think so."
Elaborating later, Dole reiterated his contention that efforts to reduce federal budget deficits will have top priority. Tax simplification will be "way behind," he added, and the chance for "action on that this year is probably not so good."
Dole's comments came in the wake of testimony Wednesday by Treasury secretary-designate James A. Baker III that the Reagan administration is giving equal priority this year to deficit reduction and tax simplification.
President Reagan has endorsed the idea of tax simplification but has not yet embraced specific legislation. Treasury Secretary Donald T. Regan, who will succeed Baker as White House chief of staff, has proposed a modified "flat tax" plan that would reduce the number of tax brackets, lower the maximum tax rate and eliminate many present deductions, exemptions and other tax breaks.
Tax simplification "sounds great, but to get it done is something else," Dole told the chamber. "I think it's going to be very difficult," he added.
In comments to reporters later, Dole said he thinks hearings on tax simplification will be held this year. As an eventual proposition, it is "very much alive," he said.
Sen. John H. Chafee (R-R.I.), third-ranking member of the Senate Republican leadership and a member of the tax-writing Finance Committee, also expressed pessimism about prospects for tax revision this year.
"If we have energy left over" after considering deficit reductions, "we will deal with tax simplification," Chafee said. "I think we have a big plateful with these reductions."
Meanwhile, Sen. Barry Goldwater (R-Ariz.) suggested in a floor speech that tax rates may have to be raised to help reduce deficits, but later told reporters he meant ultimately, probably not this year.
"We must take a hard look at the deficit that is going to grow," Goldwater said in his speech. "We will have to look at tax rates that will have to be raised. We must look at an economy that is good now but might not be so good in the future."
Warning that a lower standard of living may be necessary to resolve the budget crisis and fend off "national bankruptcy," Goldwater said "welfare-state" spending contributes more to the deficit problem than rising defense expenditures do.
As the new chairman of the Senate Armed Services Committee, Goldwater has been cautioning increasingly against extensive defense cutbacks but said yesterday that he would "not make a flat statement that we cannot decrease the money spent there on defense ."
However, he added, "We could eliminate the entire defense budget and still not get out of the trouble we are in."
Responding to Goldwater's tax comment, Dole and House Minority Leader Robert H. Michel (R-Ill.) immediately denied that tax increases would be part of a Republican deficit-reduction plan.
Dole implied, as he has before, that tax increases would be considered only as a last resort.