Reagan turns to Democrats for votes to pass tax hike
Washington — President Reagan, who has pulled off many a close win on Capitol Hill, will have to pour on all of his legendary persuasive powers to pass the $98.9 billion tax bill.
Already he has lost 60 to perhaps 80 rebellious House Republicans who oppose virtually all tax hikes. Ironically, his best hope now lies with the opposition party.
They may look like the odd couple, but Republican conservative Ronald Reagan and House Speaker Thomas P. (Tip) O'Neill Jr., a Democratic liberal, are working together to sell the whopping tax bill to a reluctant Congress.
While dozens of GOP House members are trooping to the White House for a lecture on why the nation needs the new revenues, the Speaker is working on Democrats. And the usually highly partisan Mr. O'Neill is also soft-pedaling his jabs at the GOP.
If the Republicans deliver enough votes, and especially if President Reagan delivers one of his ''fireside chats'' on television backing the bill, the Speaker predicted that he could deliver enough votes.
''We're looking for a victory,'' O'Neill told reporters Tuesday, adding that it will not be easy to win over members who want to duck a tax hike during an election year. ''We've got work to do, and we're doing it,'' he said.
As part of the effort, Rep. James M. Shannon (D) of Massachusetts has sent a letter to his Democratic colleagues urging them to back the bill.
''There is no avoiding the fact that we desperately need a tax bill,'' writes Representative Shannon, warning that without it the result would be ''enormous budget deficits, high interest rates, and prolonged recession.''
The Shannon letter also cites what could be the major selling point on the tax bill to Democrats -- its tax reform provisions. Most of the new taxes would be raised from corporations by closing a variety of tax loopholes, as well as by raising more taxes from the very wealthy and cutting half the tax deduction for business lunches.
The bill, which is now being debated by a House-Senate conference, also includes measures that would bring in more taxes by enforcing laws already on the books. Most controversial is the proposal to withhold 10 percent of interest and dividends, except for the elderly and poor. New taxes would also include doubling the cigarette excise tax to 16-cents a pack, an airport tax, and a tax on long-distance telephone calls.
The US Chamber of Commerce has launched an all-out effort to defeat the bill, charging that it is dangerous to raise taxes during a recession. The National Association of Manufacturers has charged that the bill will discourage industrial growth and delay the economic recovery.
These groups have found an ally in Rep. Jack Kemp (R) of New York, leader of the GOP tax revolt and cosponsor of income tax cuts voted by Congress last year.
However, Representative Kemp is far from alone in opposing the tax hike. The President has this week recruited his former adviser, Lyn Nofziger, once a critic of the tax bill, to help him. But he will have trouble trying to convert members of Congress.
One Sunbelt Republican, who has firmly backed the President in the past, says he is typical of colleagues who as of now would vote ''no'' on the tax increase. ''I'm really looking at this from the standpoint of the country, the deficit, and my district,'' he says. Even in his politically safe district, he says, voting for a tax hike could spell disaster.
Conservatives demand that, as a price for the tax increase, Congress must first prove that it will make all the spending cuts it promised in last June's budget resolution. Leaders in both Houses hope to take up the tax bill late next week, just before the Labor Day recess.