Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, March 13, 1990 TAG: 9003133524
SECTION: NATIONAL/INTERNATIONAL PAGE: A/2 EDITION: EVENING
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Bush praised Rep. Dan Rostenkowski, D-Ill., for making a "very broad proposal" in coming out with a far-reaching package that would include both higher taxes and a freeze on Social Security.
The administration surprised some Democratic lawmakers Monday by being unexpectedly receptive to the proposal by the Democratic chairman of the House Ways and Means Committee.
"I was, in being receptive, somewhat colored by the way in which chairman Rostenkowski approached this, the evident good will on his part to break the ice and move the process forward," Bush said today.
Congressional Democrats had welcomed the White House's conciliatory words about Rostenkowski's dramatic deficit reduction plan while claiming outright administration support is what is really needed - something they didn't get from Bush.
The president told a news conference in the White House briefing room he would not embrace Rostenkowski's plan for new taxes. "I'm not for a tax increase," he said, adding that there were many other parts of the Rostenkowski package he also did not support.
Asked if he could assure the American people that taxes would not be raised as part of a deficitreduction scheme, Bush said: "I'm only one player. But you know my position. I have no intention of changing that position."
When pressed and asked under what circumstances he might support a tax increase, the president retorted: "Too hypothetical. Nice try."
"I don't want to appear inflexible, but I'm not about to stand here and give him, Dan, or the Congress, the idea that I'm going to accept everything in their approach," Bush said. Still, he added, "We're prepared to negotiate."
Summing up action on the deficit, Bush noted that Rostenkowski had proposed his plan, "we've thrown our idea out" with the fiscal 1991 budget, and now "we'd like the budget leaders on the Hill to throw theirs out."
White House spokesman Marlin Fitzwater on Monday said, "We want to consider this plan."
Richard Darman, Bush's budget director, called the package "a courageous initiative, a serious initiative."
Speaking on public television's "MacNeil-Lehrer NewsHour" Monday night, Darman said, "At least there's a whole package here to start a serious debate with."
The White House reaction to the Illinois Democrat's proposal produced the first glimmer of hope that real progress could be made this year in shrinking the budget deficit. The Congressional Budget Office projects the shortfall in fiscal 1991 - which begins Oct. 1 - will be $161 billion.
The administration's words left a hopeful but wary feeling among Democrats, who have been sensitized to the dangers of leading the way in advocating tax increases by three consecutive presidential election defeats.
Citing Bush's ability to veto Rostenkowski's package and embarrass Democrats who backed it, House Speaker Thomas Foley, D-Wash., said, "Without assurances it will be signed, it will be difficult to pass."
Rep. Leon Panetta, D-Calif., chairman of the House Budget Committee, said two components of Rostenkowski's proposal - tax increases and a one-year freeze on cost-of-living increases in Social Security benefits - would be "veryhuge political barriers" to overcome.
"Those are very sensitive political issues that would be very difficult to accomplish within Congress unless there's a clear recognition that the president will join hands with them on the issue," Panetta said. Nonetheless, lawmakers of both parties said they hoped this could eventually lead to serious efforts to reduce the federal deficit.
"Dan Rostenkowski has correctly challenged Congress, the administration and the American people to face up to public enemy No. 1: the federal deficit," said Senate Minority Leader Bob Dole, R-Kan.
On Sunday, Rostenkowski - whose committee oversees taxes, Social Security and other federal benefit programs - suggested a package he said would reduce next year's deficit to $106 billion and lead to a $2 billion surplus by fiscal 1994.
Over the five years ending in 1995, he said, the plan would save $512 billion from currently projected deficits.
Rostenkowski would shrink the defense budget by 3 percent annually, about 1 percent more than current administration plans.
He would freeze domestic spending for one year, including cost-of-living increases for the 39 million recipients of Social Security, but exempt many benefit programs for the poor.
The 33 percent income tax rate would be extended to the nation's 600,000 wealthiest taxpayers, who now pay a 28 percent rate. Federal taxes on cigarettes, beer, wine and gasoline would increase, among other steps.
by CNB