He Won’t Back Legislation Unless It Is ‘Revenue Neutral’ : Dole Ties Support of Tax Bill to Deficit

Senate Majority Leader Bob Dole (R-Kan.) warned Sunday that he and other Senate Republicans will not support tax reform legislation unless it is a genuinely “revenue neutral” measure that corrects tax inequities without affecting revenues.

“If the tax bill is not revenue neutral, but adds $25 (billion) to $50 billion to the deficit, it will not pass. I will not vote for it; Senate Republicans will not vote for it. The last thing we want is a tax bill that increases the deficit,” Dole said during an interview on “John McLaughlin’s One on One,” a syndicated television program.

As it stands, the Administration proposal that awaits processing by the House Ways and Means Committee and the Senate Finance Committee will be “a revenue loser by about $25 billion” without factoring in possible revisions designed to salvage such much-used deductions as that for state and local taxes, Dole said.

Dole, a former Finance Committee chairman, cautioned that efforts to compensate for the revenue loss by paring back the $2,000 personal exemption that would be allowed in the Administration proposal could mean that “you’re not going to get a bill.”

“They tell us . . . they’re going to collect $4.7 trillion over five years, so that if it’s $47 billion lost or $47 billion gained, it’s revenue neutral,” Dole continued. “So, the Administration has, in effect, endorsed a tax increase of $47 billion. They’ve also said that a $47-billion loss is revenue neutral. I don’t think that’s accurate.”

Dole voiced concern that the series of annual budget deficits on the order of $200 billion yearly foreseen by some economists will soon mean that half the proceeds of the federal income tax will be required to pay the interest on a national debt that is approaching $2 trillion.

Dole denied that he failed to show up for a July 30 leadership meeting at the White House because he was miffed at President Reagan’s rejection of proposals to trim the deficit by deferring scheduled tax indexing and Social Security cost-of-living raises. But he said he was indeed irked at “the way the staff handled the rug-pulling-out-from-under-us trick” by announcing the presidential decision before senators were informed.

“I’ve since talked to the President,” Dole said. “We don’t have a problem.”

When asked if he thought his concern about the deficit is shared by Rep. Jack Kemp (R-N.Y.), a champion of supply-side economics who is a potential contender for the 1988 GOP presidential nomination, Dole fobbed off the question with a soft answer.

“I don’t think he likes the deficit,” the Kansas senator said. “I think he feels less strongly about it than some of us, but his theory is that you’re going to grow out of it. . . . I wish it would happen. We wouldn’t have to worry about cutting programs or raising taxes.”