House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) said yesterday that, rather than abide by the tradition of seniority, he might take his strongest allies to a conference committee being convened to reconcile the House version of tax overhaul with the Senate bill approved Tuesday.
That move could give Rostenkowski a stronger hand than his Senate counterpart in the conference, Senate Finance Committee Chairman Bob Packwood (R-Ore.), providing a slight advantage to such House priorities as full deductions for Individual Retirement Accounts and state sales taxes. Packwood is considering including all 20 members of his committee in the negotiations with the House.
Rostenkowski, known to relish horse-trading, also said in an interview that his position in the bargaining will be strengthened by the nonbinding resolutions attached to the Senate bill calling for continuation of current IRA and sales-tax deductions because they put senators on record as favoring tax breaks their legislation would curtail and the House bill would retain.
No final decision has been made about whether to use seniority or loyalty as the ultimate criterion in choosing Democrats to accompany him on the conference committee, Rostenkowski said. But he added that he has been reading records of the committee's bill-drafting sessions to see who had been most supportive.
"What I'm going to try and do is put members on who were enthusiastic about and support tax reform, and who in most part weren't representing people in the halls," Rostenkowski said in a reference to the hordes of lobbyists who jammed the office building where the Ways and Means panel wrote its legislation last year.
Rostenkowski and others said yesterday, however, that they expect the conference to be more amicable and positive than might be expected from a panel whose decisions will affect millions of individual and business taxpayers.
Although both the House and Senate bills would reduce tax rates for individuals and business while limiting many deductions, the House bill would cut back more on companies and the Senate measure would limit more breaks for individual taxpayers. Both would give individuals as a group a tax cut of at least $100 billion over five years.
"Usually you think of a conference as two hostile camps going into battle -- a Super Bowl," said Sen. Bill Bradley (D-N.J.), an early supporter of tax overhaul who does not know if he will be included in the conference. "This conference is really an opportunity to harmonize the differences between two good bills. All parties want to get a bill."
Bradley said he expects to see Rostenkowski pushing for a larger tax cut for middle-income earners, a theme legislators from both parties have endorsed. Packwood is likely to press for tax rates as low as possible, Bradley suggested. The current top tax rates for individuals is 50 percent; the Senate bill would slash that to 27 percent, the House to 38 percent.
Because the ultimate piece of legislation must bring in the same amount of revenue as the current tax system, deductions have to go if rates are to fall. These trade-offs were painful in both houses, but particularly so in the Senate, where amendments to restore major tax breaks failed narrowly.
Instead, by overwhelming margins, senators approved nonbinding resolutions supporting the full deduction for IRAs and sales taxes. Senators also endorsed, 94-to-1, a resolution supporting the largest possible tax relief for the middle class, amid complaints their bill does not supply it.
Rostenkowski said, "If those are the priorities, the conference will go very well."
One compromise, Rostenkowski suggested, is a three-rate system to replace the two brackets in the Senate bill and the four proposed by the House. "There is a number in the middle. What that rate could be could solve a lot of problems," Rostenkowski said. He also said he expected the conference to agree to reduce tax rates at the same time as the deductions are limited. Both the House and Senate bills would cut rates six months after most other changes, to save federal revenue.
Republicans on both the Finance and Ways and Means committees are expected to choose conferees by seniority, while Finance Committee Democrats -- and Packwood -- seek to include Bradley, a relatively junior member.
Packwood has floated the idea of including all 20 members of the Finance Committee in the conference. Rostenkowski invited Packwood to "bring the whole Senate if he wants, as far as I'm concerned."
But Rep. John J. Duncan (Tenn.), ranking Republican on the Ways and Means panel, said, "If he brings 20 people to conference, we'll be there til Christmas."
Staff writer Dale Russakoff contributed to this report.