Reagan's 'stick' to back compromise 'carrot' on tax cut
President Reagan now is ready to put all his popularity and clout on the line to get his tax bill enacted -- if that is necessary. White House insiders say that Mr. Reagan won't wait more than a day or two for Democratic liberal leaders in the US House of Representatives to go along with his compromise bid.
Should House Speaker Thomas P. O'Neill Jr. (D) of Massachusetts and others in the House continue to resist these overtures, then Reagan will put on what Sen. Bob Dole (R) of Kansas calls an "all-court press" aimed at persuading House Democrats to jump ship and help shape a GOP victory.
Rep. James Jones (D) of Oklahoma, chairman of the House Budget Committee, says he thinks Reagan can win such a struggle if he puts forth the same kind of all-out lobbying effort he did in the fight for his budget.
The Republican-controlled Senate cannot be counted on to automatically support Reagan's tax plan. Several GOP senators are concerned that the envisioned tax cuts -- 5 percent the first year and 10 percent for each of the next two years -- would be inflationary and would work against balancing the budget.
However, with Senate majority leader Howard H. Baker Jr. (R) of Tennessee and Senate Finance Committee chairman Dole, who is the chief writer of the current compromise, fully behind the proposal, it is expected that Republican senators in the end will give it their support.
The real struggle for tax cuts focuses on the Democratic- controlled House. Some conservative House Democrats already have met with Reagan and indicate they will go along with his compromise bill. However, the President knows it will be much more difficult to pick up votes from House Democrats on the tax cut than it was on the budget.
Hence, Reagan would prefer to sweeten his bill sufficiently to bring Democratic liberals with him this time.
Rep. Dan Rostenkowski (D) of Illinois, chairman of the House Ways and Means Committee, has indicated that the Reagan-Dole compromise measure might be acceptable to the House Democratic leadership.
Mr. Rostenkowski and others in the House would like to avoid the possible embarrassment of another defeat. Also, he sees that in being a part of a compromise, Democrats could take some credit for putting together the victory, even though he knows in the end it will be called a Reagan tax bill.
However, House liberals, who make up the majority of Democrats in that body, at this point apparently are unwilling to go along with Rostenkowski. Rostenkowski still is trying to convince them. But Reagan indicates the time is fast running out.
Actually, Rostenkowski wants some changes in the compromise bill tendered by Dole. He would like to see the three- year element cut back and tax-cut benefits added for those to fall within the $15,000- to $50,000-a-year income bracket. Dole has indicated that Reagan might reduce the time element to 30 months and that there might be more tax cuts for those Rostenkowski would like to help.
But the resistance the Illinois Democrat is encountering from his liberal colleagues comes from their feeling that Reagan's tax effort, if successful, will necessitate trimming or eliminating many of their favorite social programs. Thus, the battle now, much more so than over the budget, has become an ideological one.
Rostenkowski may still persuade his mates to go along with him. He will argue that a compromise between liberals and Reagan would be much more acceptable to liberals than the final bill that would eminate from the administration if Reagan decided to marshal conservative Democrats and members of his own party and go it alone.
The Reagan compromise bill at this point is flexible. But Reagan's stick is there, too. If House leaders can't agree on a compromise, he may well embarrass them again with the help of conservatives. And, further, the bill he will be pushing will be sweetened toward the conservatives, not the liberals.