
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 27, 1990                   TAG: 9006270290
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: METRO 
SOURCE: JACK NELSON LOS ANGELES TIMES
DATELINE: WASHINGTON                                LENGTH: Medium

REVERSAL MAY EVEN HELP HIM

In 1988, when he accepted the Republican presidential nomination, George Bush declared that the Democratic-controlled Congress "will push me to raise taxes, and I'll say, no, and they'll push, and I'll say no, and they'll push again, and I'll say to them, `Read my lips: No new taxes."

Now, by abandoning the promise that became the watchword of his presidency, Bush has sown dismay among his supporters and robbed his party of what Republican strategists call their strongest single issue - the one that best differentiates the GOP from the Democrats.

Paradoxically, many political strategists in both parties agree that - in the long run - breaking his most explicit promise to the American electorate could benefit him politically.

So long as any tax increase that may eventually emerge from the continuing budget negotiations is viewed as dealing with the deficit and improving the economy, even Democratic strategists see little permanent damage to Bush.

Indeed, if opening the door to new taxes does boost the flagging economy, Bush could reap rewards.

A Washington lobbyist and former senior official of the Nixon and Ford administrations, who declined to be identified, said, "This hurts Bush's credibility in the short run, but his target is long-range and re-election in 1992. The deficit and a possible recession are the biggest threats to his re-election."

And, despite the dramatic nature of his shift, Bush has done no more than open the door to discussions about tax increases. He did so safe in the knowledge that, in an election year, the Democrats will be no more eager than he is to impose higher taxes unless economic conditions appear to demand it.

In any event, with his own Congressional leaders telling him budget negotiations might collapse unless he relented, Bush had little choice but to scrap his read-my-lips pledge.

The alternative was to accept even graver political risks: being blamed for the looming possibility of a runaway budget deficit, the threat of higher interest rates and the danger that a budding recession in the Northeast spreads through the nation.

Bush drew surprising support from Housing and Urban Development Secretary Jack Kemp, whose political career has been based on faith in supply side economics and the doctrine of cutting, not raising, taxes.

Kemp, whose opposition to tax increase led to a dramatic break with President Reagan over the 1982 tax increase, insisted Bush's statement only meant he wanted to boost tax revenues, not taxes.

"And he thinks and I think with him that getting the economy back on track, getting interest rates down, getting the capital gains tax rate down will do a lot more for added revenues than putting a surtax on the backs of the American people, which seems to be the Democratic idea," said Kemp, who said that he had talked to Bush after the announcement and felt "very comfortable" with it.

For the most part Democrats, who have insisted all along a tax increase would be necessary to reduce the budget deficit, applauded Bush's decision.

"He's doing the right thing, it's a very positive step," said former Democratic Chairman Robert Strauss. "The risk to his presidency is not taxes, it's failing to deal with the budget. He was shooting dice with the economy by not dealing with the budget, but now he's taking the lead and that will enable the budget summit [of administration and congressional leaders] to function better."

Nonetheless, Bush's action brought cries of anguish from many in his own party.

More than 70 House Republicans fired off a letter to Bush declaring that they were "stunned" and would not support a budget package with tax increases. Some Republican strategists said they feared Bush's decision would cost the GOP in the 1990 elections, when all 435 House seats and a third of the Senate seats are up for re-election.

A senior adviser to the Democratic House leadership, who declined to be identified, said the tax issue "is finally gone," a development he considered another piece of good news for Democrats on the order of the end of the Cold War and the shift in the balance of political power on abortion following the Supreme Court's Webster decision last year.

"First the Republicans lost the defense issue, then they lost the abortion issue," he said. "Now Bush has broken his promise on taxes and the third leg on their triad is gone."

by CNB