Senate Finance Committee Chairman Robert Packwood (R-Ore.) yesterday retracted a threat he made just the day before to try to kill President Reagan's tax plan if timber tax breaks aren't preserved.
On Wednesday, Packwood said he would do "everything possible to kill the entire bill" if the ultimate version removed low tax rates on the sale of timber, as the administration plan proposes.
Yesterday, the Oregon senator -- who is up for reelection next year -- said his promise was an "overstatement." He remains opposed to doing away with timber tax preferences, which are considered crucial to the economy of his home state, but "will not oppose the bill in its entirety on the basis of those provisions alone," Packwood said in a written statement.
The chairman's change of heart came after Treasury Secretary James A. Baker III called him Wednesday afternoon and pointed out that Packwood had never told him he planned to hold the bill hostage over the timber provisions, according to Packwood spokeswoman Etta Fielek. She also said that Packwood had personally approved the statement issued Wednesday threatening to kill the plan.
Treasury Department spokeswoman Kim Hoggard said officials were "happy to see that he's for tax reform. He's a key element in getting tax reform passed, and we're happy to see his remarks."
Packwood is reported to have threatened in the past to hold tax restructuring hostage to the timber provisions. On July 2, he told a civic club in Eugene, Ore., that if the timber provisions were not removed from the tax legislation, "there will be no bill. Period. At all," according to The Associated Press.
Meanwhile, Deputy Treasury Secretary Richard G. Darman said yesterday that the tax plan "is moving along a bit better than one might reasonably have expected" and dismissed objections to it as "pops in a shooting gallery."
In a speech to a group of lobbyists and congressional aides, Darman offered one of the administration's first public assessments of the progress of the tax proposal, which would reduce income tax rates and curtail many deductions and credits.
Darman indicated that the administration will show flexibility on several important areas of the plan. As officials have said in the past, Darman said "technical corrections" may be made in the way the plan treats two-income families with children and that "there are all kinds of ways to manage" those corrections.
Many of those families would be less well off than other kinds of taxpayers if the administration succeeds in winning repeal of the "marriage penalty" deduction for two-earner couples and the conversion of the child-care credit into a deduction.
Darman also hinted that the administration would be willing to accept measures that would reduce the size of the tax cut for the very highest income brackets. As it now stands, the lowest-income taxpayers would get the largest cut, on average; the highest-income the second largest, and middle-income taxpayers the smallest cut -- about 7 percent.
"If this becomes a bit of a perceptual problem nonetheless, I should note that the problem is hardly fundamental," Darman said. "A change of $1.4 billion in the upper-income tax liability could bring it exactly in line with the average . . . the problem might disappear merely as a result of minor modifications in the reform proposals that may emerge from the legislative process."
Darman compared the tax plan to a bear in a shooting arcade, which gets winged frequently but keeps on walking.
"It has well survived the publication of a 461-page description and analysis that amounts to a detailed targeting guide for interested marksmen. And, notwithstanding the predictable pops in the shooting gallery, its progress is being pushed on a bipartisan basis -- not only by the pioneering tax reformers, but also by the chairmen of the House and Senate tax-writing committees."
Asked later about Packwood's Wednesday statement, Darman mentioned Packwood's change of heart and said Treasury studies would show that other provisions to which Packwood has objected -- treatment of the middle class in particular -- are not as onerous as they appear to the committee chairman.