Reagan Warns Against Any Tax Increase : Hails Balanced-Budget Bill but Vows to Veto Levy to Cut Deficit

Times Staff Writer

President Reagan congratulated Congress Saturday for approving legislation of "truly historic importance" but warned lawmakers not to take up measures upon their return that would either raise taxes or cut defense spending.

"My veto pen is inked up and ready to go," he said from Camp David, Md., in his weekly radio address. "I'm just waiting for the first tax hike that has the temerity to come across my desk."

Reagan particularly praised the passage of two measures: sweeping tax overhaul legislation approved by the House and the Gramm-Rudman amendment, which requires Congress and the President to take action beginning early next year to balance the federal budget by 1991.

'Sober-Minded Realism'

The President also applauded lawmakers for showing "a new mood, a new point of view" reflecting "sober-minded realism" in foreign policy by voting this legislative session to aid anti-Communist forces in Cambodia, Afghanistan and Nicaragua, and by lifting the 9-year-old ban on support to rebels in Angola. He called it "especially significant" that aid to anti-Communist guerrillas was approved by the Democratic-controlled House.

"I'm convinced that a new bipartisan foreign policy consensus is emerging--one based upon realism and which unites Democrats and Republicans alike in support of a strong national defense and help for freedom fighters around the globe," he said.

In the Democratic response to the President's speech, Rep. Charles E. Bennett (D-Fla.) said members of his party can support Reagan's policy of helping "freedom fighters" as long as the President "follows international law and does not try to subvert existing governments."

"Democrats can only buy that policy if it is done consistent with international law," Bennett said. "We can hardly criticize the Soviets for intervention against established governments if we do the same thing ourselves."

Tax Amendments Urged

Bennett also praised Reagan and House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) for the bipartisan tax overhaul measure but urged that it be amended to include "a real minimum tax" so that corporations "could not evade their tax responsibility."

Bennett praised the balanced budget amendment but attributed the current deficit problem to the President's 1981 tax cut, "which slashed government revenues but not government spending."

Reagan, who has often used his radio address to attack Congress for its failure to act on one bill or another, had considerable praise Saturday for its actions last week. But he tempered his enthusiasm for the tax bill, saying it contained "serious flaws." He urged the Senate "to perform its work quickly and to make absolutely certain that the final bill is unequivocally pro-family, pro-jobs and pro-future."

Although he praised the passage of the Gramm-Rudman bill--which he called by its full name, Gramm-Rudman-Hollings--he served notice that he will not tolerate tax increases or a reduction in defense funding to meet the requirements of the new law.

Tax Increase Predicted

Enacted earlier this month and named after its three sponsors--Sens. Phil Gramm (R-Tex.), Warren B. Rudman (R-N.H.) and Ernest F. Hollings (D-S.C.)--the legislation has caused many lawmakers to predict that the deep budget cuts needed to comply with it will lead to a tax increase or additional efforts to reduce defense spending.

"Although Gramm-Rudman-Hollings tells us that we must cut the deficit, it does not altogether tell us how to do so," Reagan said. "Will we fund wasteful pork barrel programs at the expense of our national defense? Will we kill off our prosperity with a tax increase? No matter how intense the political pressures become, the answer to both these questions must and will remain an unmistakable no."

He added: "Defense spending must depend not upon this or that guideline but one consideration alone--the size of the threat with which our adversaries confront us."

Congress last week appropriated $297.4 billion for military spending during the current fiscal year. The figure is 1.5% over last year and not sufficient to compensate for inflation. It was the first real reduction in defense spending since Reagan took office and sharply curtailed the massive military buildup of the previous four years.

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