House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), quiet until now on tax simplification, said yesterday he will cooperate with the Reagan administration in moving a bill through his committee.
Rostenkowski's decision, to be announced in a speech to the New York Economics Club this evening, is a boost to President Reagan's hopes for bipartisan cooperation on legislation to simplify the tax code.
"I would like very much to see a Ways and Means product in cooperation with Treasury and the House Democratic and Republican leadership," Rostenkowski said in an interview.
"I'd like to see us do a good job of tax reform or simplification, and I'd like ultimately to have my committee considered the tax-writing committee rather than the revenue-raising committee," he said in a reference to the tax bills of the last three years.
Senate Majority Leader Robert J. Dole (R-Kan.) said the Rostenkowski decision "makes a big difference," although he said the first priority of Congress is deficit reduction and that it will remain difficult to pass a tax bill this year.
Dole said that the White House and Senate Finance Committee Chairman Bob Packwood (R-Ore.) have shown an interest in a tax bill. Adding Rostenkowski to the list could produce some form of tax bill this year, he said.
"If all this comes together, you might get some of it this year," Dole said.
Rostenkowski's decision was somewhat of a surprise. Since taking over the House tax-writing committee in 1981, he has originated little major legislation, and there were suggestions that he was biding his time to try for a House leadership post.
When the Treasury Department proposed its tax simplification plan in November, Rostenkowski endorsed the general idea of reform but said translating that idea into law would require presidential leadership.
Now, friends say, he has decided that tax simplification should not be abandoned to the Republicans and might be a good issue with which to be associated.
"He's more enthusiastic than he's publicly been given credit for and more enthusiastic than he was three months ago," said one longtime associate.
The Treasury plan would reduce tax rates dramatically and abolish a host of deductions and credits for individuals and businesses, leaving a "revenue-neutral" bill.
It is opposed by many interest groups that would lose tax preferences that they consider crucial.
Rostenkowski said the administration's "Mexican hat dance" -- attempting to revamp the Treasury plan before Reagan endorses it -- "might be a mistake."
"The longer it takes us on a bipartisan basis to do this, the more are the forces amalgamated in the preference areas to fight us," Rostenkowski said.
Another reason for Rostenkowski's shift, associates say, is his cordial relationship with newly confirmed Treasury Secretary James A. Baker III. It was after a meeting with Baker that Rostenkowski announced that the Ways and Means panel would hold hearings on tax simplification this Wednesday, with Baker as the sole witness.
That is in contrast to what sources say are Rostenkowski's not-so-amicable feelings about White House chief of staff Donald T. Regan, who was treasury secretary during the bitter battle over the 1981 tax cut that the Democrats lost in a partisan "bidding war."
"He thinks the 1981 bill created an image problem that still hasn't been dispelled," said a Ways and Means Democrat.
Rostenkowski said in the interview that he had good relations with Regan and did not want to criticize him. But, he said, "I never felt that Regan was much in charge, and I guess that's because the office at 1600 Pennsylvania Avenue was running all the shows. And so you have Jim Baker, with a lot of the experience he grasped at 1600, over at Treasury."
White house officials say they hope that Rostenkowski will be a "broker" as tax simplification moves through the legislative process, because he appears to have good working relations with all parties and does not have a vested interest in any tax plan.
Rostenkowski is expected to emphasize in today's speech, as he has in recent statements, that simplificaiton can pass only if Reagan pushes hard. He also will sound several themes familiar to supporters of tax simplification: It should bring in the same amount of revenue as current law; it must be considered as a package with no tax preferences excluded; business should look beyond its own particular interests in deciding whether to support simplification, and many current tax breaks were once worthy but have gone too far.
Although Rostenkowski didn't say so in the interview, public opinion has often focused on the Democratic sponsors of tax simplification, Rep. Richard A. Gephardt (D-Mo.) and Sen. Bill Bradley (D-N.J.), and occasionally ignores the tax-writing committees.
Asked if he wants to see a bill named "Rostenkowski-Bradley-Gephardt," Rostenkowski replied, "If I had my druthers, I'd like to see it called the Rostenkowski-Duncan bill after ranking Ways and Means Republican Rep. John J. Duncan of Tennessee so that there is a Ways and Means flavor."