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Influential Lawmakers of Both Parties Predict Opposition : House Expected to Resist Benefit Freeze

Times Staff Writer

Influential congressmen from both parties predicted Sunday that the Democratic-run House will resist the one-year freeze on Social Security cost-of-living increases included in the budget package that squeaked through the Republican-controlled Senate on Friday.

Although Rep. William H. Gray III (D-Pa.), chairman of the House Budget Committee, refused to pledge unqualified support for the cost-of-living increases that the Senate-passed bill postponed, he predicted that House members “are probably not going to do what the Senate did to senior citizens, by asking them to carry 21% of the deficit reduction by a freeze (on the increases), as well as increasing their premiums and deductibles on Medicare.”

Rep. Trent Lott (R-Miss.), assistant minority leader of the House, commended the Senate for voting to cut projected spending by $56 billion in fiscal 1986 and $300 billion in the next three fiscal years but said he has “a different set of priorities.” Lott had criticized the freeze earlier, when the Administration-approved budget compromise was approved by the Senate on a 50-49 vote.

Lott, appearing with Gray on the CBS News program “Face the Nation,” estimated that a majority of House Republicans will join in opposing the freeze on cost-of-living increases, which is designed to save $6 billion in Social Security outlays next year and additional sums in other pension programs. But he said it would still be “very simple” to get to more than $50 billion in spending cuts by continuing where the Senate left off in slashing other programs.

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Like other leading Republicans, Lott took a go-slow attitude toward a proposal, which is said to have the support of House Majority Leader Jim Wright (D-Tex.), for a minimum tax on corporations to ensure that companies that use legal exemptions do not escape taxes entirely. Such a proposal “should wait to be part of a major tax reform package if it’s going to be applied, and it may very well be,” Lott said.

Rep. Dick Cheney of Wyoming, chairman of the House Republican Policy Committee, said in an appearance on NBC-TV’s “Meet the Press” that Republicans will support the minimum corporate tax “within the framework of tax reform, as opposed to deficit reduction.”

“We’re fearful that if you get into the business of raising revenue in the deficit reduction effort, you will have eliminated the possibility later on of closing loopholes, broadening the tax base, maybe adding something like a corporate minimum tax and then using the revenue generated from that to lower rates,” Cheney said.

Budget Director David A. Stockman, who preceded the House members on “Face the Nation,” said the minimum corporate tax had not been offered as part of the deficit-reduction package “because revenues aren’t the problem overall.”

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“In terms of deficit reduction, the problem is spending, and we have to reduce that first,” Stockman said. He predicted an eventual “fundamental restructuring of our tax code” and said that under it “some corporations not paying taxes now will be required to pay taxes, but in return we’re going to be able to lower the rates on the average taxpayer who gets no shelters, no deductions, and is contributing a disproportionate share of the burden today.”


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