The Senate's journey toward a new tax bill begins today with a two-hour bus trip to a country inn in Berkeley Springs, W.Va.
Members of the Senate Finance Committee embark at noon for an overnight "retreat" on tax overhaul, much as House Ways and Means Committee members retired for a weekend in rural Virginia before writing the tax-overhaul legislation that passed the House.
The pressures are greater than during Ways and Means' bucolic weekend last fall, when it was questionable whether the House could pass a tax bill. Senators, faced with a House-passed bill, must acknowledge the possibility that the bill they write could become law and that President Reagan will push the Republican-controlled Senate to act.
"There's a sense the baby is on our doorstep. It's there, and we've got to do something with it," said Sen. David H. Pryor (D-Ark.).
Treasury officials say they hope the weekend sessions will produce a collective sense among committee members that tax overhaul is now their issue. But those officials say they expect it to be difficult to recreate the unusual political dynamic that pushed a bill through the House despite an apparent feeling among most House members that the bill had grave problems.
Asked why tax overhaul is under consideration when many senators think that the budget deficit -- including the need for a tax increase -- and trade imbalance are more important, Sen. John Heinz (R-Pa.) responded, "The president wants it. Period."
Reagan faces a tough test in the Senate, administration officials and senators agree. "After the weekend, we will know whether the 'let's-don't-kill-it-here' attitude will take hold," said Sen. David L. Boren (D-Okla.), an opponent of tax overhaul. "That's how it got out of the Ways and Means Committee. That's how it got through the House. At some point in time, somebody has to blow the whistle on that."
The private meetings are not expected to produce agreement on the substance of a tax-overhaul bill, which Finance Committee Chairman Bob Packwood (R-Ore.) said he plans to begin drafting in March after several weeks of hearings. But Packwood and administration officials say they hope that the retreat will serve several functions:
*It will permit senators -- nervous about curbing deductions to reduce tax rates -- to express their fears to Treasury Secretary James A. Baker III and his deputy, Richard G. Darman. Packwood said he hopes "they will understand the passion with which certain members, in some cases a majority of members, feel about certain issues."
*Baker and Darman will push for changes in the House bill to make business investment writeoffs more generous, to raise the personal exemption to $2,000 for most taxpayers and to lower the top personal tax rate to 35 percent from its current 50 percent. The top tax rate in the House bill is 38 percent.
"I hesitate to call it a retreat," Baker said in an interview. "We ought to call it a charge. We ought to be charging foward with changes in the House bill."
*Senators will have a chance to talk about the procedures they will use to write a bill, procedures that will be vitally important in determining the bill's shape and fate. Packwood said he has not decided, for example, whether the House bill, a Finance staff proposal or some other document will be used as the basis for committee consideration. He also will have to find a way to keep the legislation from being eroded by amendments that lose federal revenue.
Packwood, Senate Majority Leader Robert J. Dole (R-Kan.) and administration officials are concentrating on moving a bill quickly, both to overcome substantive objections and to complete action before pressure to raise taxes to meet deficit-reduction goals intensifies in the fall.
Packwood said this week the only circumstances under which he could envision Congress approving a tax increase would be if economic projections in the fall show tax revenues falling short of earlier estimates, increasing the deficit despite extensive spending cuts.
It will be difficult enough, analysts agree, just to keep the legislation from bringing in less revenue than the existing law. Reagan has suggested restoring a provision from his original tax plan that would end the federal deduction for state and local taxes on sales, property and income. Packwood has raised the possibility of ending only the deduction for sales and personal-property taxes while retaining the others.
Many committee members say they think, however, that the issue will be as politically unpalatable in the Senate as it was in the House, where Ways and Means Chairman Dan Rostenkowski (D-Ill.) retained the entire deduction to obtain support for the bill.
Noting that Reagan tried to say that ending the state-and-local tax deduction would benefit low-tax states whose residents would get a net tax cut, Sen. Lloyd Bentsen (D-Tex.) said, "Try to explain that to the independent school districts in your state."
There also will be pressure from senators to use new, non-income taxes such as a fee on imported oil and oil products, or a tax on consumption, to "pay for" the restoration of tax breaks. Such taxes probably will be widely discussed at the retreat. But Packwood and Reagan in recent days have ruled out such new taxes.