Senate Finance Committee Chairman Bob Packwood (R-Ore.), one of the central actors in the battle to overhaul the tax code, made his debut as a tax negotiator while a committee member in 1984. It was an inauspicious beginning.
The setting was a House-Senate conference, and Packwood led an effort to protect a part of the tax code dealing with one of his pet interests.
Packwood's goal was to kill two House provisions that limited tax-exempt fringe benefits, and he asked for the right to handle them in conference. He made his presentation emotionally and forcefully and, as the talks dragged on, held out against all compromises -- with disastrous results.
Packwood's Senate colleagues, left with no room to negotiate, deserted him. House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), incensed by Packwood's approach, refused to budge, according to sources involved with the conference.
The senator was forced to concede defeat on both efforts.
Now, as Congress is considering the broadest overhaul of the tax code in more than 30 years, the Oregon senator faces negotiations far tougher than the skirmishes of 1984. To fulfill his pledge to move a tax-revision bill through a nervous committee and a reluctant Senate, Packwood will have to display diplomatic skills and leadership ability -- while he pursues his own agenda -- beyond what he has had to muster before.
His first six months as chairman of Finance have left open two principal questions: Does he actually want a major overhaul of the tax code? And will he be able to lead the committee as successfully as did his two predecessors, Senate Majority Leader Robert J. Dole (R-Kan.) and Sen. Russell B. Long (D-La.)?
Over a period of three weeks, Packwood said through a spokesman that he could not schedule an interview for this article. Others involved in the tax debate, however, described the role he may play.
Administration officials concede that the independent Republican could become the key figure in pushing through a tax bill.
"Of all the people who could screw it up, chances are it will be him," said a Treasury Department official who asked that his name not be used.
Other central figures have made clear where they stand. Rostenkowski, for example, is said to have decided that passing a bill would serve his political interests. He wants to produce a bill along the general lines of President Reagan's plan, which would reduce tax rates in return for wiping out or eliminating numerous deductions and credits.
Rostenkowski also has a more restrictive House process working in his favor: His committee probably will write the tax bill in closed session, and House rules permit the bill to be voted on in the full House with few or no amendments.
The outlook in the Senate is much messier. The Finance Committee is unlikely to write its tax bill behind closed doors, and debate on the floor can be limited only by a vote of 60 senators. The Senate also is less disposed toward overhauling the tax code than is the House.
Packwood has made headlines recently by issuing conflicting statements on what kind of tax bill he wants -- or whether he wants one. When the Treasury Department released its first tax proposal in November, Packwood said he "sort of" liked the tax code the way it was.
Since then, he has endorsed the principle of tax overhaul, while quibbling with numerous elements of the Treasury plan and its successor, the president's proposal.
He has said he would like to see the top tax rate lower than the 35 percent the Reagan plan proposes (the current top rate is 50 percent). That would have to be "paid" for by getting rid of more deductions than the president wants, but Packwood's suggestions have generally been in the direction of adding tax preferences.
For example, he threatened to hold the entire proposal hostage if it retained provisions raising taxes on the timber industry. Packwood retracted that threat under pressure from Treasury Secretary James A. Baker III, but colleagues say his action set a bad example to a committee fond of special tax breaks, especially because the administration already had liberalized the fringe-benefit portions of the plan at Packwood's behest.
"When he says he'll take care of a specific interest in his state, the others say, 'I'll take care of economic interests in my state,' " said a Finance Committee Democrat. "I don't see how they can do it if the chairman says he's got to have exceptions."
Packwood also has objected that middle-income taxpayers would get a smaller tax cut than those in other income brackets would in the Reagan plan, and has occasionally wandered entirely off the Reagan reservation and suggested such changes as a tax on consumption, an excise tax and a tax on imported energy. Even Packwood's close aides and colleagues on the committee aren't sure exactly what kind of tax bill he wants.
Asked where Packwood stands, Sen. Bill Bradley (D-N.J.) responded: "I don't know. I figure at this stage, uh, he, I don't know where, I mean, I don't know, I mean you know, you just take him at what he says."
Packwood has made it clear that he believes strongly in using tax benefits to further such social goals as health care, child care and private education. Proponents of purer tax overhaul generally prefer to achieve such goals through the more visible method of federal spending.
"I'm confused by Sen. Packwood," said tax economist John Makin of the American Enterprise Institute.
Packwood is up for reelection in 1986, and the interests of his Oregon constituents may partly explain why his positions have varied. He made his threat to hold the plan hostage to the timber provisions, for example, just a few days after Rep. Ron Wyden (D-Ore.) held a heavily attended hearing in Portland on the timber tax provisions. Wyden has been mentioned as a possible rival for Packwood's seat next year.
Analysts suggest that Packwood may be remembering the experience of former Ways and Means Committee chairman Al Ullman, who was defeated in 1980 partly because he lost touch with his Oregon district and because of his support for a value-added tax. Packwood won his seat in 1968 from former senator Wayne Morse, who also was said to have neglected his home state. And Packwood has not generally won reelection by wide margins.
"Oregon has a peculiar tendency to vote out any of its representatives who appear to place national interests over Oregon interests," said former Packwood aide David Jory.
Aides say Packwood is a studious, intelligent legislator who often arrives at the office at 6 a.m. Meticulous and prepared, Packwood has chaired almost every minute of the hearings his committee has been holding since mid-June. Rostenkowski, by contrast, often delegates the chair to other committee members.
Packwood, 52, also reads every page of the three-inch briefing books prepared for each tax hearing, and learns the material well enough to ask his own questions of the witnesses, rather than those written for him by the staff. He also has won praise for the debate format arranged for several of the hearings, where opposing views are presented together.
"I think he's making an honest effort," said Sen. John H. Chafee (R-R.I.), one of Packwood's racquetball opponents. "He's a skeptic in some parts but he's made a commitment to the president."
Chafee suggested, however, that Packwood and the whole committee might become distracted from revising the tax code if the tax measures proposed as part of the Senate budget compromise take center stage.
As chairman of the Senate Commerce Committee for four years before coming to Finance, Packwood set a style that differs sharply from the pattern set by Dole and Long. Both of those men were negotiators. Dole shepherded two controversial tax-increase bills through the Senate in 1982 and 1984, in part by thorough vote-counting and deal-making. As committee chairman, he was known for disliking surprises and liking control.
Packwood, on the other hand, occasionally made proposals in Commerce without knowing how every committee member would vote, and suffered some defeats as a result. Some analysts suggested that his recent timber outburst was a strategic error, because it signaled to the House exactly what provisions he cared deeply about.
Packwood has achieved significant legislative successes, however, including Senate passage of telephone deregulation legislation. In Finance, he got a controversial tax to pay for cleaning up toxic wastes through the committee by a 16-to-2 vote.
"He wins," said Finance Committee chief of staff William Diefenderfer, who also worked for Packwood on Commerce. "Everybody likes to work for a winner. It's like playing for the Yankees."
Administration officials say they aren't worried about Packwood's ideological commitment and negotiating savvy, contending that he and other Senate Republicans will have little choice but to go along if the House passes a tax bill that the president supports. Packwood has not veered from his schedule so far, they point out.
What they don't mention is that the senator from Oregon has differed with the administration on numerous issues in the past.
He opposed the president on the sale of AWACs surveillance planes to Saudi Arabia, is a strong advocate of the right to abortion, worried publicly that Reagan's policies were losing the support of nonwhite, nonmale, non-Protestant voters, and got into a fuss with the White House in 1982 when he described Reagan telling anecdotes about food-stamp fraud during discussions with senators about the budget deficit.
Packwood apologized for the remarks -- but did not retract them.