Rostenkowski Makes Democrats’ Strongest Call for Tax Increase

In the strongest call for a tax hike by any prominent Democrat since the 1984 presidential campaign, House Ways and Means Chairman Dan Rostenkowski told the nations’ governors Tuesday that President Reagan must alter his frequently stated opposition to increasing taxes if the deficit is to be significantly reduced.

“The President can have his way on taxes; the President can have his way on deficit reduction,” the Illinois congressman told the closing session of the National Governors Assn. winter conference. “But he cannot have his way on both.”

Lesson of 1984

Although many Democrats are known to favor some sort of revenue increase to cut the deficit, they have been leery of saying so directly for fear of political repercussions. Their caution reflects in part what many took to be one of the chief lessons of the 1984 campaign, when Democratic nominee Walter F. Mondale made a tax increase the centerpiece of his economic program and then carried only one state.

And, even in making what one of his aides, John Sherman, called his most direct proposal for a tax hike, Rostenkowski was reluctant to get too far out in front on the issue. When asked by reporters after his talk what sort of a revenue increase he had in mind, Rostenkowski said that there is no point in his going into such specifics unless Reagan first indicates that he is willing at least to consider a tax hike.

Nevertheless, Rostenkowski, whose committee writes tax legislation in the House, was forthright about making his pro-tax position clear.

“I have long been a strong proponent for tax increases as a means to shrink the deficit,” he said. After recalling business and excise tax increases enacted in 1982 and 1984, Rostenkowski added: “We found that paying more taxes doesn’t have to halt the country’s expansion.”

Rostenkowski, who was mainly responsible for shaping the tax reform legislation approved by the House last year, said: “We can have tax reform and tax increases.” But he warned against trying to include tax reform and a tax increase in the same bill, an approach, he said, that would “risk losing them both.”

Although Rostenkowski credited Reagan with curbing the trend toward steady expansion of the federal government, he bitingly criticized Reagan’s approach to fiscal policy.

“The President is a man unencumbered with the nagging little details and contradictions of deficit reduction,” Rostenkowski said. “He knows how popular it is to talk about massive cutbacks in spending--and how painful it is to fill in the names of the victims.”

Need ‘to Seek a Balance’

Rostenkowski said that failure to solve the deficit problem would help foster the public belief that “we can no longer govern” but that success would depend on the willingness of Congress and the President “to seek a balance.” The current healthy state of the economy makes the task easier, he said.

“If the decision is to cut spending right down the line--and raise taxes--the economy is durable enough to absorb part of the shock,” he said.