O’Neill Sees House Victory for Tax Bill : Failure to Pass It Would Be Fatal for Reform, Reagan Says

Speaker Thomas P. (Tip) O’Neill Jr. predicted today that tax overhaul legislation would survive in the House, and President Reagan sought to make sure by warning legislators that failure to pass a bill now would mean “tax reform might be ‘dead’ for several years.”

While Reagan turned his attention to keeping his tax initiative alive, Congress began trying to shorten a stack of important fiscal legislation requiring action before members of the House and Senate can go home for the year.

Congressional leaders had hoped to finish work for the year by the end of the week, but Senate Majority Leader Bob Dole (R-Kan.) said today that there is only “a little glimmer” of hope that will happen.

Overhaul ‘Doom’ Forecast

After a revolt by his Republican allies and the erosion of Democratic votes, the President sent House members a letter saying a vote against tax overhaul this week “would doom our efforts to achieve real tax reform for the American people.”

House Republican leaders have said they cannot go along with a tax bill drafted by the Democratic-led Ways and Means Committee. A GOP alternative has virtually no chance of passage in the House, where consideration of the tax issue is expected Wednesday.

Some Republicans have recommended killing both bills and starting over next year.

But Reagan said either measure would provide “substantial improvement over present law and represent a significant and essential first step toward real tax reform.”

Nonetheless, presidential spokesman Larry Speakes refused to say whether the President would sign the tax bill produced by the Ways and Means Committee.

Aiming for Senate

Speakes said Reagan wants a bill to go to the Republican-controlled Senate to keep the issue alive. Administration officials have argued that the Senate could shape the legislation more to the President’s liking.

“A tremendous amount of work has already gone into the process that has brought us this far,” Reagan said in his letter. “If a bill does not move forward from the House now, it is reasonable to suggest that tax reform might be ‘dead’ for several years.

“From this perspective, the House vote is essentially a vote on whether or not to sustain the possibility of tax reform--to allow the legislative process to continue in the difficult effort to fashion a satisfactory bill,” the President said.