37 in House Assail Rostenkowski Plan

A group of 37 House Republicans, upset with Ways and Means Chairman Dan Rostenkowski’s new tax revision proposal, urged President Reagan Saturday to expand his list of non-negotiable goals and not accept tax reform at any cost.

The lawmakers, led by Reps. Jack Kemp of New York and Trent Lott of Mississippi, said that they were most concerned with the provision in the Rostenkowski plan that would raise the personal exemption from $1,080 to $1,500, rather than the $2,000 level proposed by Reagan.

Ways and Means aides said that, under the Rostenkowski plan, the $500 difference would be shifted to the standard deduction and would effectively provide more relief to taxpayers who do not itemize deductions.

But Kemp contended that the move would be “a large step backwards from the President’s proposals to improve the fairness of the tax code for American families, especially those with children.”

Kemp and the 36 other Republicans asked Reagan to announce an expanded list of tax reform goals on which he will insist and called on him to oppose any measure that did not meet the goals.

“A flawed tax reform measure would do our nation and your Administration more damage than no tax bill at all,” the Republicans said in a letter delivered on Friday and released Saturday. “Compromises on details are acceptable and expected. Capitulation on the goals and principles of your historic reform are not.”

The Rostenkowski proposal, announced last Thursday, is to be used by the Ways and Means Committee as the basis for drafting legislation--a process that will continue on Monday and is expected to take weeks.

Although it is being used as a starting point, the Rostenkowski plan is expected to undergo numerous changes in committee.

Rostenkowski (D-Ill.) said that, although his plan changed key parts of the Reagan proposal, it was designed to keep the “spirit” of Reagan’s plan.

Committee aides stressed that it left untouched the four areas Reagan felt strongest about--keeping the deduction for mortgage interest on principal homes, having a 35% top personal tax rate, moving people below the poverty level off the tax rolls and making sure the bill would not result in the loss of revenue for the government.

Rostenkowski has asked Reagan not to comment on the committee’s work until a bill emerges. The White House has said it has no plans to interfere.

But the 37 GOP House members called on Reagan to come out against not only the reduced personal exemption but several other provisions, including a top corporate tax rate and a capital gains rate that are higher than Reagan proposed.