Efforts to Defeat or Change Bill Seen as Futile : Tax Overhaul Opposition Vanishes

When conference committee tax writers approved their massive tax overhaul bill last month, an enraged Sen. John C. Danforth (R-Mo.), his home-state defense contractors skewered by the legislation, vowed to fight it on the Senate floor.

But that was August. In September, as Congress prepares to return Monday from a three-week vacation, outright opposition to the most comprehensive income tax revision in half a century has all but melted away.

Danforth, who had called tax overhaul a legislative “gorilla” when the House-Senate conference panel approved it on Aug. 16, spent most of his vacation fishing instead of rallying the opposition, an aide said this week. His talks with a few senators so far have inspired more curiosity over the legislation than pledges to oppose it, the aide said.

No Tide of Mail

The influential National Assn. of Home Builders, which blitzed the tax-writing committee with lobbyists during a June vacation, basically ignored the issue during the August recess. And congressional aides say that the tide of voter mail that usually precedes votes on major bills has yet to wash over their offices.

“The lobbying has been nil,” Jim Arberry, a spokesman for Sen. Donald W. Reigle Jr. (D-Mich.), said of the tax bill. “I don’t know if people assume it’s a fait accompli , but they know at this stage there’s no way to change it.”

In fact, opponents and backers alike say that nothing short of a stock market crash or an unexpected denunciation of the bill by its godfather, President Reagan, will stop tax overhaul from becoming law late this month.

That concession is even more striking because those legislators and lobbyists with vital interests in the bill’s defeat are giving up the fight before they have even seen the foe. The hundreds of pages of the conference report on the tax bill--in effect, the handbook that states precisely what the bill does--are still being laboriously written by Congress’ Joint Tax Committee and will not be published until mid-month or later.

Even the normally dour Dan Rostenkowski (D-Ill.), chairman of the House Ways and Means Committee, which helped draft the tax plan, has been unable to suppress a cheery attitude about the prospects for tax revision. “I’m very optimistic. Everybody is very upbeat,” he told reporters this week after speaking to a Washington business group.

Calls for Tax Hike

Rostenkowski was confident enough to renew his call for a federal tax increase to cut the budget deficit--a proposal whose mere whisper roused the ire of Reagan and Republicans during the summer’s talks on a final tax bill. “The President’s opposition notwithstanding, this country is not unwilling to pay higher taxes--as long as they are fair,” Rostenkowski said in his speech.

That, in turn, prompted Senate Majority Leader Bob Dole (R-Kan.) to sound the only sour note heard this month on the tax bill’s chances. “All this talk about tax increases endangers quick action on final passage of the bill,” Dole said Friday in a statement. “It makes no sense to talk about raising tax rates while we are trying to pass a tax reform bill that lowers rates.”

However, most observers see little danger that tax overhaul will be defeated. “There’s just a tremendous amount of political momentum behind this bill,” said Jeff DeBoer, director of federal tax programs for the National Assn. of Realtors. The realtors’ group, one of Washington’s richest and most powerful political forces, is less than pleased with some parts of the legislation but plans no strenuous effort to defeat it, DeBoer said.

That momentum will be further fueled this week and next as the two chairmen of Congress’ tax-writing committees, Rostenkowski and Sen. Bob Packwood (R-Ore.), dispense “transition rules” worth more than $11 billion that will ease the pain of the new tax law for favored constituents in virtually every senator’s and representative’s home turf.

More than 1,000 requests for transition rules have poured into the two chairmen’s offices from fellow lawmakers in the last few months, a congressional aide said.

Keeping Tax Benefits

Most of the requests would allow constituents to keep tax benefits they had counted on--a factory that has contracted to buy equipment, for example, might be allowed to keep the tax credits it counted on when it made the purchase--or stretch out the transition from old tax law to new.

The chairmen have promised to keep most of the scores of rules written into the House and Senate tax bills that were passed last winter and spring, and the final bill approved last month chipped in an extra $5 billion for additional transition rules.

“They’ll do their best” to be fair in awarding the tax breaks, the aide said of the chairmen. “They try to make it a generic rule that everyone gets the same treatment.”

That applies to friends and foes of the bill alike, the aide said, including Danforth, whose impassioned tirade against the tax overhaul bill was the highlight of last month’s vote to send the legislation to the House and Senate floors.

“He’s got loads” of requests for transition rules, the aide said, “and he’ll get ‘em. You can’t go against a guy just because he lost his temper once.”