Housing and Urban Development Secretary Jack Kemp, in his first public disagreement with the Bush administration over budget policy, told a House subcommittee yesterday that he strongly supports legislation that would extend the use of tax breaks to encourage private developers to build low-income housing. Kemp, who has embraced the low-income housing tax credit as an alternative to the return of massive, federally sponsored housing construction programs, said that extending the expiring tax credit program would offset other government housing cuts. But John G. Wilkins, the Treasury Department's acting assistant secretary for tax policy, said that while the administration agrees with the "objective" of the program, there is not enough money in the budget to absorb the cost -- nearly $3 billion over five years. "We are talking about a program that is not in the president's budget," Wilkins said. "There are many other worthwhile programs that are not in the budget this year." Kemp and Wilkins took pains to stress areas of agreement rather than conflict. Kemp called the differences a matter of "emphasis" and "tactics," but members of the Ways and Means subcommittee on select revenue measures, including Rep. Charles B. Rangel (D-N.Y.), expressed little patience for the Treasury Department's view of what expenditures should be made on low-income housing. "While many of us would like to have more money, we realize we are in a housing crisis," Rangel said. "What we shouldn't have is a crisis in leadership." Kemp is drawing up a HUD response on this and other issues that will include a revamped tax credit program as well as suggestions for providing tax breaks for enterprise zones and enhanced affordable housing programs. "Why shouldn't the tax system be used for a socially desirable goal like housing low-income people in America?" he said in a recent interview. "I've always been interested in tax reform, and I see it as reform, not as a tax cut or a tax break." The low-income housing tax credit provision was enacted in 1986 as part of the sweeping revision of the tax code passed by Congress that year and has become popular among private sector and nonprofit developers. Some of those developers expressed concern about the split between the two departments over the issue. "One official has his foot on the gas pedal and the other has it on the brake." said Paul Grogran, president of the Local Initiatives Support Corp. Legislation introduced by Rangel, Senate Majority Leader George J. Mitchell (D-Maine) and Sen. John C. Danforth (R-Mo.) would make the credit permanent and attach provisions to the measure aimed at ensuring that low-income properties remain within the reach of the poor. Under the current program, the federal government allocates credits to state governments, which in turn award the credits to developers involved in the rehabilitation or construction of units that charge rents totaling no more than 30 percent of the tenant's income. About 68 percent of the available credits were allocated last year. A committee aide said that House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) is sympathetic to finding revenues that would offset the one-year cost of extending the credit, but consid- ers extending it permanently to be too costly. Staff writer Kirstin Downey contributed to this report.