White House Offers a Deal to Democrats to Get Tax Bill : Plan Fails to Win Enough GOP Votes

The Reagan Administration and Republican leaders offered a proposal today aimed at keeping the President’s tax-overhaul plan alive but failed to deliver the 50 to 75 GOP votes that Democrats say are necessary to pass the bill.

The bill remains available for the House to consider Monday, giving President Reagan time to find another 17 or more Republicans who are willing to stand up for a tax plan that he lists as the No. 1 legislative goal of his second term. Only 14 of the 182 Republicans sided with the President on Wednesday when the House refused even to consider the bill.

House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) emphasized that Democrats will not even discuss making concessions to Republicans until the President shows him the votes.

Statement Clarified

“As soon as the President informs me personally that he has a list of 50 to 75 Republican votes for passage of the bill, we will begin moving ahead with the bipartisan (tax) reform process,” O’Neill said.

The Speaker issued his written statement after listening to Treasury Secretary James A. Baker III explain the latest Republican offer, which House GOP Leader Robert H. Michel of Illinois had put together. A central part of that proposal would allow the House to consider a Republican amendment raising the personal exemption to $2,000.

After meeting with Baker and O’Neill, Rep. Dan Rostenkowski (D-Ill.), manager of the tax bill, said he doesn’t want to see his legislation changed but raised the possibility that Republicans might be allowed to offer the $2,000 exemption as an amendment to their own substitute tax bill. “That’s negotiable,” he said.

Has No Chance

However, that GOP bill has no chance of passage, and any attempt to amend it would be nothing more than a face-saving gesture for Republicans.

Although the necessary Republicans are not lined up for the bill, Rostenkowski said: “The President is doing his job. He’s talking to members and I’m impressed.”

Democratic strategists said the latest GOP offer was accompanied by a pledge of 33 Republican votes--at least 17 short of O’Neill’s demands.

The Speaker promised he “will continue to hold the door open to the President” but emphasized that there will be no further effort to pass the bill until Republicans get aboard. “It would be a disservice to the President and to the cause of tax reform to permit another Republican-led debacle such as occurred on Wednesday,” O’Neill said.

Against Reagan

On that surprise vote, the Republican leadership sided against the President. Michel and other Republicans say the bill crafted by Rostenkowski’s Ways and Means Committee is fatally flawed, especially in its treatment of business. The $140-billion of taxes that the bill would shift from individuals and corporations would damage investment and U.S. ability to compete abroad, Republicans say.

Under the package they are trying to negotiate, the House would be allowed to vote on whether a $2,000 exemption would be provided for everyone, not just non-itemizers, as the bill allows.