Rostenkowski Assails Defense-Tax Linkage to Budget

A major dispute erupted Wednesday among congressional Democrats over the fiscal 1988 budget, with House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) charging that a Senate plan to link higher defense spending to tax increases is “unworkable and probably unconstitutional.”

Rostenkowski’s complaints were outlined in a private letter to Rep. William H. Gray III (D-Pa.), chairman of the House Budget Committee, who is heading the House delegation in a conference with the Senate to work out a compromise budget plan.

The public airing of the letter, which was leaked to the news media, immediately provoked outrage from Democrats, who have been striving to appear unified in drawing up a budget resolution in the face of strong criticism from the Administration.

‘Mail Thieves’

“Somebody stole it from my office,” Gray told reporters who had received copies of the letter. “I don’t plan to respond to mail thieves,” said Gray, refusing to discuss the message.

Rostenkowski’s office confirmed that he had sent the letter, and a spokesman said the chairman was “shocked and dismayed” at its public distribution.

Democratic officials said they fear that getting a consensus among House and Senate conferees on the budget will now be more difficult because of the embarrassing disclosure of their strong disagreements.

The Senate resolution, approved last week, proposes $30 billion in new revenues by 1989, contrasted with $19 billion proposed by the House. The greater amount sought by the Senate “may be impossible to achieve,” Rostenkowski said in the letter to Gray.

Defense, Taxes Linked

In addition, the Senate budget resolution contains a “pay-for-defense” provision, with $7 billion in military outlays tied to an identical sum in higher taxes. With President Reagan vowing to veto any budget that includes higher taxes, the White House and congressional Republicans have said that the measure amounts to holding defense spending hostage.

Although the Democrat-controlled Senate adopted this plan, Rostenkowski objected vociferously in the letter to any automatic connection between taxes and defense. “Obviously, the desired amount of defense spending may influence the revenue amount,” he said in the letter. “However, there is no reason to make this a direct linkage.

“This simply is unworkable and probably unconstitutional as well.”

Gray said Wednesday that he would discuss these issues privately with Rostenkowski, “one chairman to another.”

Prepares Tax Legislation

Rostenkowksi is a vital player in the budget process because his committee is responsible for preparing tax legislation. Without his enthusiastic participation, it would be impossible to get the tax revenues that would be required by the budget resolution.

But accommodating Rostenkowski could greatly complicate Gray’s task in reaching an accord with the Senate.

Sen. Lawton Chiles (D-Fla.), chairman of the Senate Budget Committee and the leader of the Senate conferees, was able to win approval of a budget resolution in the Senate only after he came up with the novel way to provide more for defense. The House plan provides for $9 billion less in defense spending.

A spokesman for Chiles said the senator had not seen the Rostenkowski letter and would have no comment on its sharply worded attack.

The Senate and House conferees made little progress Wednesday, simply noting the differences in their budget resolutions. The plans set the broad outlines of federal spending for the 1988 fiscal year, which begins Oct. 1. Individual committees will decide later how much is spent for particular programs, and the tax-writing committees will decide how to raise the revenues required by the budget resolution.

The Senate plan calls for more tax revenues than the House plan and would spend greater sums for defense, spaceflight programs and medical care. The House would spend more for education and job training programs.