Reagan Repeats Objection to Taxes to Reduce Deficit

Congress returned to work today facing the politically thankless task of cutting the budget in an election year, and President Reagan again voiced opposition to tax increases as a way of reducing the red ink.

At the White House, Reagan repeated to Senate Republican leaders his stand against new taxes or deep defense cuts to trim the huge $200-billion deficit under a new law designed to balance the budget in five years.

As far as Reagan is concerned, Senate Finance Committee Chairman Bob Packwood (R-Ore.) told reporters, there will be “no tax increases, no new taxes, nothing.”

But Senate Republican leader Bob Dole of Kansas hinted that taxes may be needed to meet budget targets set under the Gramm-Rudman law. He said Reagan also opposes deep defense cuts due to be made under the law.

Dole later told reporters on Capitol Hill that tax reform, Reagan’s top non-budget issue of the year, should focus on streamlining the complex tax laws and not on raising taxes. This suggested he might favor a separate tax bill.

However, Senate Democratic leader Robert C. Byrd of West Virginia said that if taxes were to be raised, Reagan would have to propose the increases.

House Speaker Thomas P. (Tip) O’Neill Jr. (D-Mass.) at a news conference called the Gramm-Rudman law a monstrosity.

He also said Reagan’s budget to be submitted Feb. 3, which is expected to include sharp cuts in social programs but retain a 3% rise in defense spending, will face a House vote and debate so “we can spell out to the American people what his nonsensical, crazy budget does.”