Pass a Tax Bill, Reagan Tells House : Republicans Informed It’s OK to Vote for Democratic Plan

President Reagan signaled House Republicans Sunday that he will not hold it against them if they vote this week to support the tax-revision bill drafted by the Democratic-run House Ways and Means Committee over a Republican alternative--as long as they pass a bill on which the GOP-controlled Senate can work its will.

“While the proposals before the House are far from perfect, they do represent a tax code that is fairer, simpler and encourages greater growth,” the President said. “I hope the House will vote ‘yes’ next week and allow the Senate to consider, debate and improve this important measure.”

Warning of Farm Bill Veto

Reagan reasserted his readiness to follow either route to tax reform in his weekly radio talk, which included an implicit warning that he may veto farm legislation that diverges too much from Administration policy.

The President’s tax stand was better news to Rep. Dan Rostenkowski (D-Ill.), chairman of the Ways and Means Committee, which agreed last week on tax-overhaul legislation after months of effort, than it was to House Minority Leader Robert H. Michel (R-Ill.), who supports the GOP alternative.

“If we differ on the shape of reform, we don’t differ on the goals,” Rostenkowski said in his party’s broadcast response to Reagan. “It’s good to have him as an ally as we make the final push on the House floor next week. And I’ve got every reason to believe he will back his support with some political muscle in the days ahead.”

Personal Appeal Possible

Michel, in an interview with columnists Rowland Evans and Robert Novak televised by Cable News Network, conceded that Reagan could make a personal appeal to persuade Republicans to help the Ways and Means bill to passage in the Democratic-controlled House. But the GOP leader maintained that no more than 25 Republicans would vote for the committee bill--not enough to make up for Democratic defections unless Reagan’s intervention changes the balance.

When asked if he might change his mind and support the Ways and Means bill if he is lobbied by the President, the GOP leader replied: “I just cannot bring myself around to it.”

A White House official, who commented on condition that he not be named, said the President had “turned up the heat a little” in dealing with Congress on the issue but gave no details. He said that Reagan would indeed “like to see something passed” and “could probably live with either bill.”

Less Simplification

Neither of the competing House versions goes as far toward tax simplification as the original Treasury Department plan proposed a year ago. That plan would have lowered tax rates sharply, would have reduced the number of graduated tax brackets to three and would have eliminated most tax deductions. All three plans would increase corporation tax rates, but the Democratic plan proposes a 36% top rate, as against 33% in the other two proposals.

Probably the most controversial difference between the plans lies in the area of deductions for state and local taxes, which the Treasury plan would have repealed altogether. The Ways and Means Committee plan would retain the deduction in full, while the GOP plan would permit continued deductions for state income and property taxes but end the deduction for sales taxes.

In his discussion of farm legislation--a politically touchy matter for many congressional Republicans--Reagan first noted that a bill to bolster credit in depressed farming areas had been passed by the Senate and a similar measure has cleared the House Agriculture Committee, and he said he hoped “to sign an acceptable measure soon.”

Guidelines Reaffirmed

On the question of renewing omnibus farm legislation that is now under consideration by a House-Senate conference trying to reconcile bills passed by the two houses before the 98th Congress adjourns its first session, Reagan hinted at a veto if Administration guidelines are exceeded.

“I call upon the Congress to send me a bill I can sign--one that provides American farmers with hope,” Reagan said. He gave no specifics, but the White House has warned that he will not sign a bill that permits spending more than $50 billion for commodity price support programs over the next three years. The estimated cost of the Senate bill is $58 billion, and the House version is priced at $56 billion.

“As they work, the House and Senate must understand that more federal dollars are not the answer,” Reagan said. “Indeed, during our Administration, farm price and income supports have more than quadrupled. What is needed is policy reform, including a long-term plan to get government out of farming and establishing a more market-oriented farm policy.”