Democrats on the House Ways and Means Committee yesterday agreed to $6.3 billion in new taxes for 1988, half of what is needed to meet deficit-reduction targets. But they postponed consideration of proposals with any flavor of controversy.
The Democrats proceeded without Republican members of the panel, a move likely to weaken chances for passage of a tax bill by the full House.
In another sign that the two parties are far apart on deficit reduction, House Speaker Jim Wright (D-Tex.) yesterday rejected a set of proposals by Minority Leader Robert H. Michel (R-Ill.) that Michel said were necessary to bring the GOP back into the budget process. Among the suggestions: cutting the tax-increase target to between $6 billion and $8 billion and postponing consideration of tax increases until more spending bills are approved.
Democratic leaders during the day attempted to portray Republicans as ignoring their responsibilities to pass legislation implementing the budget outline they agreed to last month, while Republicans contributed to the standoff by accusing the Democrats of relying too much on tax increases and not enough on spending cuts.
"I'm not comfortable doing it this way," said Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.). "I'd prefer to have bipartisan support, but I don't have the luxury of waiting." The committee has an Oct. 15 deadline to finish work on the tax bill.
Ways and Means Democrats are to meet today to debate tax increases that generated opposition yesterday, and to consider some of the leftover provisions from President Reagan's tax-revision plan. The support of nearly all 23 Democrats on the 36-member committee will be needed when the measure is voted on by the full committee, assuming Republicans maintain their opposition.
Several items the Democrats accepted yesterday had been proposed in Reagan's 1988 budget, including requiring employers to pay Social Security tax on tips earned by their service workers, repealing the gasoline and diesel tax exemption for buses and for state and local governments, and expanding a customs fee on imports to cover goods with U.S.-made components.
Democrats also agreed to extend the current 3 percent tax on telephone service rather than allow it to expire, freeze a scheduled reduction in the estate and gift tax rate and repeal an estate-tax loophole opened by the tax-revision law.
The next $6 billion in taxes Ways and Means members hope to raise is expected to be considerably more difficult. One of the most controversial changes would extend the Medicare payroll tax to state and local government employes, an item that has been rejected before.
"It could all end up as an exercise in futility. I don't know where the final votes are now," said Rep. Brian J. Donnelly (D-Mass.), who opposes the Medicare extension. He said another proposal, to tax black-lung benefits, would cost "several dozen" Democratic votes.
Staff writer Tom Kenworthy contributed to this report.