House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) said yesterday that it is "inevitable" that President Reagan will eventually ask for a tax increase, but that his committee will not transform Reagan's tax revision plan into one.
Rostenkowski's committee opened hearings Thursday on Reagan's tax-simplification plan, which would eliminate a number of tax advantages for business and individuals in exchange for a lower and simpler tax rate schedule. It is described as "revenue-neutral," because it neither raises nor loses revenue.
Rostenkowski promised in an interview on Cable News Network that he will press committee members to keep the bill revenue-neutral by producing a revenue-raising measure for each revenue-losing provision they approve.
Without elaborating, Rostenkowski said a tax increase will come later.
"This is going to be a revenue-neutral bill because I think the president at some future date will be coming out for some deficit reduction; I think that is inevitable," he said.
"You mean a tax increase, down the road somewhere," Rostenkowski was asked.
"Yes, sir," he replied.
Rostenkowski, who has become one of the chief boosters of tax simplification, promised that his committee will work with the administration "in a very, very nonpartisan atmosphere, trying to write good reform legislation."
But he warned the White House that his committee will not maintain its bipartisan nature if it detects that the White House is playing politics by using committee decisions to attack Democrats or if it discovers that the Treasury Department has peppered the plan with hidden revenue losses that Congress must cover with tax increases.
Rostenkowski noted that the Treasury projects a relatively small $12 billion revenue loss in the Reagan plan, and "what we want to do, with Treasury's cooperation, is to make sure that there aren't any other losses that we'll have to make up in the final days of the markup."
He said the administration must be a "participant" in drafting the bill, and "I don't want to see them bumping over to the Ways and Means Committee the responsibility for finding new money if . . . the proposal essentially lost money."
He said that there will be pressures on his committee to revise the plan, particularly to revise Reagan's proposal to do away with the federal tax deduction for state and local taxes, and that "I just hope . . . that the president just doesn't say, 'Well I'm sorry, if they fool with that . . . I'll be looking for a pen.' That would be discouraging to us."
Reagan, in his regular Saturday radio address, completed a week of campaigning for his plan by saying that special interests will attempt to pick it apart, and he asked again for a flood of supporting cards and letters to Congress.
"Yes, we very much need your support, especially those who have never written before to your representatives or senators," Reagan said. "Please make your views known and remind official Washington that you expect to be listened to."