President Reagan yesterday withdrew his tentative support of an oil-import fee as part of the pending tax-revision bill and turned aside pleas from Senate Republicans that he negotiate a compromise on the budget before asking them to vote on the tax bill.
In a group interview with reporters, Reagan said some of the "compromises" suggested in a letter Tuesday from 50 senators involved a "total repudiation" of his position, and reiterated that there was "just no way" he would approve a tax increase as part of any budget deal.
A few hours later, the Republican-controlled Senate Budget Committee scheduled a vote for today on Reagan's budget request, which is almost certain to be defeated. Asked later why he acceded so readily to the demand for an early vote by Sen. Howard M. Metzenbaum (D-Ohio), Chairman Pete V. Domenici (R-N.M.) said, "We want to get it out [of the way]. Why keep fussing around?"
The committee's first session on the budget was marked by bipartisan warnings that a tax increase and what Domenici called "some damn tough choices" on spending cuts will be necessary to meet this fiscal year's deficit target.
The twin developments underlined the distance between the president and legislators of both parties as the budget battle begins. The same message was conveyed in Tuesday's letter from half the Senate.
The 50 senators, including two-thirds of the chamber's Republicans, wrote Reagan that "until a firm, definite budget agreement has been reached between the Congress and the White House, we do not believe tax reform should be considered or debated by the United States Senate.
"I know about that letter," Reagan said, " . . . but I happen to believe that every cookstove has two front burners, and there is no reason why the United States Senate . . . can't be cooking on both burners."
The letter circulated by Sen. Rudy Boschwitz (R-Minn.) was seen by some as a device for sidetracking the House-passed tax-revision bill, which Reagan has listed as his top domestic priority. But most of the signers hoped that it would prod Reagan into early negotiations on a budget compromise, averting the threat of across-the-board sequestering of funds under the Gramm-Rudman-Hollings balanced-budget law.
But the president said: "I'm already agreed on a budget. It's just up to Congress now to join me in that." His words reflected his advisers' belief that he holds the high ground politically in the looming budget showdown and can force Congress to move in his direction simply by standing fast.
In its first action, the Senate Budget Committee accepted bench marks and projections by the Congressional Budget Office that ignore administration claims that Congress has committed itself to a 3 percent after-inflation growth rate for defense spending. The so-called baseline assumes zero growth after accounting for inflation.
The agreement was significant for two reasons. It is expected to make defense spending increases more difficult to achieve. The absence of the usual partisan fighting over budget ground rules may also help pave the way for a bipartisan congressional agreement on the budget, some lawmakers said they believe. A bipartisan budget is not likely to reflect Reagan's priorities.
On the oil import fee question, Reagan was shutting a door he had opened part way on Feb. 4, when he said such a tax might be acceptable if used only "to offset some of the loophole changes" the Senate Finance Committee is contemplating in the tax-revision bill. Yesterday he said that "having looked at it . . . I have to say that I'm opposed."
The president said he was convinced "it would have a bad effect on the economy," a viewpoint strongly argued in the White House by Beryl W. Sprinkel, the chairman of the president's Council of Economic Advisers. Finance Committee aides said they were not particularly distressed at the news because opposition from senators from New England and other oil-importing regions had made it clear that the fee would not be approved by the committee.
On the other hand, Reagan said the administration was examining "very closely" the possibility of a tax-amnesty program and saw it as a possibility for ending "a situation in which we are losing billions and billions of dollars a year from people who are not paying their just share." On other domestic issues, Reagan:
*Said no decision has been made on the recommendation from his commission on organized crime that all government workers submit to mandatory drug testing, but said it was clearly justified wherever there is "a safety element" involved in the job.
"I have the same feelings that many people do about how far you go in invading the privacy of individuals," he said. "On the other hand, I can't help but think that if all of our people in government would take the lead in volunteering such a thing, it might have a salubrious effect and be an inspiration to the rest of society."
*Said he would not endorse a candidate in the 1988 Republican presidential primaries because as "titular head of the party," he could not do that "without becoming divisive . . . . "
*Endorsed repeal of the 22nd Amendment, which limits a president to two terms, because the voters in a democracy "should have the right to vote for whoever they want to for as long as they want to." Reagan made it clear that he did not seek the third-term privilege for himself.