A revolt of Republican senators insistent that President Reagan negotiate an early compromise on budget cuts emerged yesterday as a potentially serious threat to the administration's prized tax-revision bill.
With the encouragement of some key GOP senators on fiscal issues, Sen. Rudy Boschwitz (R-Minn.) is circulating a letter that would tell Reagan "action must be taken on the deficit before the Senate considers tax reform."
Boschwitz declined to say yesterday how many signatures he had collected, but another senator sympathetic to the effort said "he is well on his way toward 50." Some Democrats reportedly signed the letter, despite an effort by Minority Leader Robert C. Byrd (D-W.Va.) to keep his party's members out of the incipient GOP internal battle over legislative and political priorities for the year.
The move comes at the same time that Senate Finance Committee Chairman Bob Packwood (R-Ore.) said he is considering adding an oil import fee to his committee's tax-overhaul legislation as a way of making up some revenues lost in the House version of tax revision. The new revenue could be caught in a tug of war between those who want it to reduce the deficit and those who want it to fashion a "revenue-neutral" tax bill.
Senate Budget Committee Chairman Pete V. Domenici (R-N.M.), who is viewed by the White House as the major force behind the Boschwitz letter, said in an interview that "the predominant opinion up here . . . is that we don't want the budget crisis dragged into August and September. What can be settled then can be settled now, and ought to be."
Domenici and others who signed the Boschwitz letter have long been at odds with the president over his refusal to countenance any form of tax increase or major defense slowdown as part of a budget compromise.
Domenici confirmed that a specific concern of his and some others who signed the Boschwitz letter is that new revenues from a possible oil import fee be used to reduce the deficit rather than to increase receipts in the tax-overhaul proposal. Congress is searching for a way to meet the deficit targets mandated by the Gramm-Rudman-Hollings budget law at the same time it is laboring to produce a tax-overhaul plan that neither loses revenue nor increases it.
"That money can't be used twice," Domenici said of new revenue from a possible oil import fee. "I'm not saying we'll need $20 billion or $10 billion or $30 billion to meet the Gramm-Rudman-Hollings target but that kind of money ought to be around to use if we need it . . . and it won't be if it's part of the other [tax] package."
Packwood has declined to sign the Boschwitz letter and has told colleagues that he regards it, at least in part, as an effort to defeat tax revision by delaying tactics.
Sen. Slade Gorton (R-Wash.), who said he helped draft the Boschwitz letter, said a delay in tax overhaul is ". . . not the primary goal of this letter." Boschwitz said, "There's a very broad outpouring of sentiment either that the tax bill should be defeated altogether or that it should not move forward until there is agreement on the deficit package."
Boschwitz, who refused to make public the text of the letter, said it is "not of a threatening nature." Gorton said its point is: "No tax reform until you Reagan put everything on the table and we solve the deficit problem." In all his statements, the president has ruled out new taxes and insisted on 3 percent real growth in defense.
Boschwitz said he was considering a suggestion that "some of us go to the White House and chat with them before we send any letter." Another Republican senator, who declined to be quoted by name, said he had approached Sen. Paul Laxalt (R-Nev.), a close friend of the president's, about heading such a delegation and Laxalt had promised to consider it as a way of heading off a public confrontation.
But the challenge to Reagan's priorities -- coming on the eve of his State of the Union Address Tuesday night and formal budget proposal on Wednesday -- is a clear signal of the fundamental policy and political disagreements plaguing the Republicans in an election year when control of the Senate is at stake.
A White House official held out little hope of blocking the deficit-first effort. "We know the sentiment is 10 to 1 up there [in the Senate] to do something on the budget deficit first, and we know there's antipathy to tax reform," he said. "But the president's point of view is that it's important to move tax reform and to keep that bill revenue-neutral."
Several senators said the word "antipathy" was far too mild to describe the predominant view among Senate Republicans toward the House-passed tax bill.
The Wednesday luncheon apparently gave impetus to Boschwitz's letter-signing drive, but Democratic tax-revision advocates, such as Sen. Bill Bradley (N.J.), said they had picked up word of the Republican revolt as early as Monday. At Tuesday's Democratic Caucus, Byrd urged his party's senators "to show our support for tax reform . . . . If you do something that could delay it, then you could be scuttling its chances for passage."
Packwood confirmed in an interview with The Washington Post that he is eyeing a possible $4-to-$8-a-barrel oil import fee. "If I take it," he said, "it's not available to Pete [Domenici]."