Cat-and-mouse game proceeds on US tax bill

The Reagan administration is sniffing a deal on its tax proposal. It sees House Democrats "coming in our direction," as top presidential aide Edwin S. Meese III puts it.

A new White House count of those conservative House Democrats who jumped ship and helped the President get his budget enacted shows that half of them would support his three-year tax-cut proposal, while the rest want a two-year cut.

But the main thrust toward compromise comes from liberals in the House who simply don't want to risk another embarrassing loss to President Reagan -- should he decide to launch another all-out effort to put together a bipartisan triumph.

At the same time, the administration is aware that it will face a difficult fight if the President is forced to go the route he did in winning the battle over the budget. Mr. Reagan would prefer to work out a compromise that would avert an all-out battle.

Thus, the White House is talking in terms of "flexibility," and the administration is elated over the apparent willingness of House Democrats to embrace the "multiyear" element in the President's tax-cut proposal.

Further, the Reagan camp will "look at" a House Democratic counterproposal that would include a two-year time frame -- particularly if there were provisions that would cite that the fulfillment of certain stipulated changes in economic conditions would trigger a third-year tax cut.

Meanwhile, the President is taking the bargaining position that he will not give further concessions on his original "10-10-10" tax-cut plan other than those encompassed in the compromise unveiled last week by Sen. Bob Dole (R) of Kansas, chairman of the Senate Finance Committee.

The Reagan-Dole plan is "5-10-10" (a 5 percent cut for the first year and 10 percent cuts for each of the two succeeding years). It also gives ground on the original Reagan proposal for the first-year cut to take place on July 1 -- moving it to Oct. 1 of this year.

"Why give up more than this," was the administration position as expressed by Mr. Meese at breakfast with reporters June 3, "until we hear what their [the House Democrats'] proposal is going to be?

"But we are willing to look at any reasonable proposal," Meese said.

Asked whether it might be something less than 10 percent in the second or third year, or both, Meese smiled and said, "We will be willing to look at any reasonable proposal. I won't rule that out."

The momentum for compromise, from the House Democrats' side, comes mainly, it seems, from anxiety among congressmen lest they soon be viewed by their constituents as obstructionists to the basic program of a just- elected and popular president.

Meese says the House's Democratic leaders are "moving our way." When asked whether this include House Speaker Thomas P. O'Neill Jr., he said: "Tip is moving out of the way -- that is, he is moving out of the way of those who are moving our way."

Here Meese added: "The reason for this is that it is becoming clear that the public is fully behind us -- for the combination of the tax cuts and the spending cuts. More than 70 percent of the public supports this combination."

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