Senate Majority Leader Robert J. Dole (R-Kan.) suggested yesterday that a strong bipartisan vote in the House for a corporate minimum tax would make it a "live option" for a final compromise between the House and Senate on how to reduce the deficit.
Dole's comments came as House Democrats remained divided over whether to allow a vote on a minimum-tax proposal later in the week.
Some Democrats see it as a useful method of raising money to augment their plan to cut deficits by more than $250 billion over three years through spending cuts.
The spending cut plan drew at least two counterproposals, including one from Republicans that would not raise taxes and another from moderate Democrats that would raise taxes by an amount about equal to that expected to be raised by a corporate minimum levy.
Dole's remarks at breakfast and luncheon meetings with reporters represented his first indication of willingness to consider tax increases of any kind in as part of deficit-reduction legislation, although he never ruled it out as a "last resort."
Following President Reagan's lead, he resisted inclusion of taxes in the Senate version of the measure, supporting instead a move to reserve the corporate minimum levy for inclusion in tax-simplification legislation Reagan plans to introduce this month.
But, with the Democratic-controlled House and Republican Senate heading toward a clash over defense and Social Security spending, the prospect of additional revenues could help break a possible deadlock.
It might also provide a trade-off that otherwise could result in a much smaller deficit-reduction plan than either chamber wants.
In comments yesterday, Dole first indicated a minimum tax might be sought as an alternative to freezing Social Security benefits for a year, which the Senate approved and the House Budget Committee opposed in its draft budget that will be before the full House this week. But later he said he would look at the tax basically "to enlarge the whole pot."
In what appeared to be a veiled invitation to the House to propose the minimum tax, Dole said, "If there's a big, big vote for it in the House, it will be a live option in conference."
He added that he would not be averse to its inclusion in the deficit plan, although he suggested it ultimately might be relocated in the tax-simplification legislation.
Dole suggested a tax that would raise $10 billion to $20 billion over three years.
Several minimum tax plans under consideration would raise considerably more.
In the latest of these, a group of Democratic moderates and conservatives proposed amendments to the Budget Committee deficit-reduction plan that would add $54 billion in tax increases over three years, along with a one-year freeze of all government pensions, including Social Security.
The proposal did not specify a minimum tax, but proponents said it is a major option. The plan would cut deficits by $75 billion next year, compared with $56 billion under the Senate and House committee plans.
The Republican leadership plan would cut deficits by slightly more than $56 billion.
It is similar to the Senate plan in that it would allow military spending to grow with inflation; the House committee freezes it at current levels.
But, unlike the Senate version, the House GOP plan would provide full cost-of-living increases for Social Security recipients.
And it would cut deeper into domestic spending than the House committee version, including termination of nearly a dozen programs.
Also pending for the House vote on Wednesday or Thursday are proposals from a group of moderate-to-liberal Republicans and from the Congressional Black Caucus. A decision on whether to allow a vote on the minimum tax, or possibly a vote on nonbinding language on the subject, is expected to be made after a Democratic caucus on the tax issue today.