Turnaround by Reagan on Taxes Feared by Democrats

Key Democrats suggested Monday that the Administration has backed away from its promise to consider proposals for a tax increase, as the White House’s second week of deficit-reduction negotiations with Congress got off to a slow start.

“My feeling is that there still must be a demonstration of good faith by the Administration,” House Speaker Jim Wright (D-Tex.) said. “I had thought the situation of the stock market crash would have awakened him (President Reagan) to the necessity of . . . real, honest-to-God negotiations. Let us hope it has.”

Although they couched their delicately worded complaints in expressions of continued optimism about the talks, Wright and other leading congressional Democrats made it clear that they are growing impatient as the Administration continues to turn aside proposals for higher taxes.

In the wake of the stock market’s plunge Oct. 19, Reagan pledged to put everything but Social Security “on the table” in the search for ways to reduce the budget deficit. But Wright expressed concern Monday that the White House negotiators may be bound by “arbitrary restraints.”

Tensions over the issue spilled onto the House floor as Republicans--still smarting over a bitter vote on a deficit-reduction bill last week--called for a series of procedural votes that delayed adjournment on what had been scheduled to be a slow Monday.

Democrats have complained during early negotiating sessions that the White House team, led by Chief of Staff Howard H. Baker Jr. and Treasury Secretary James A. Baker III, has refused to go beyond the spending cuts and relatively modest tax increases outlined in the President’s own budget last January.

“We all have to shed our ideological and partisan positions of the past,” House Budget Committee Chairman William H. Gray III (D-Pa.) said. “The President’s budget got 27 votes (in the House). Someone needs to remind them of that.”

One Democratic aide, speaking on condition that he not be identified, complained that, with the stock market showing signs of stabilizing, “the sense of urgency has disappeared.”

But negotiators continue to face pressure of another sort: $23 billion in automatic spending cuts that will occur later this month unless negotiators can agree on an alternative plan to reduce the deficit by that amount.

It was the prospect of those painful automatic reductions--half from defense, half from domestic programs--that also helped drive the two sides to the bargaining table last week.

“The idea was that it was going to be a sort of free and open negotiation,” the Democratic aide said. “Until there’s a sense of movement on the President’s part, I don’t think our guys anticipate anything happening.”

New Proposals Set

Negotiators met only briefly Monday in closed session and promised to return today with a new round of proposals. However, both sides played down the idea--suggested in published reports over the weekend--that they might limit Social Security cost-of-living increases as a means of reducing the deficit.

When asked about Reagan’s view of any budget plan that includes caps on cost-of-living increases for Social Security recipients, White House spokesman Marlin Fitzwater said he would not comment on specific proposals but added: “The President’s feeling is very strong that Social Security is not one of those programs that we should be tampering with.

“It’s a very important social contract between the government and our elderly citizens, and we just don’t feel that it should be a part of this negotiating process,” Fitzwater said.

Similarly, Wright told reporters that it would be difficult to build support for any plan curbing growth in Social Security payments.

But Fitzwater sought to avoid a specific statement about any aspect of the negotiations. “It’s pretty difficult to say, in the course of negotiations like this, exactly what might come back to the President and what kind of recommendations might come up,” he said.

As the talks continue to show little progress, however, friction over deficit reduction is growing. House Republicans, angry over Democratic parliamentary tactics in winning narrow approval last Thursday of a $12-billion tax increase, expressed their frustration by using a rare parliamentary maneuver to paralyze the chamber.

Delays Balloting

In last week’s vote, Wright held open the balloting until he could sway the single vote needed to pass the bill.

“We want to make sure the Speaker fully understands and appreciates what wrong he did to the minority last week,” Republican leader Robert H. Michel of Illinois said. “You’re getting right on the fringe where the Speaker himself is getting mighty damned autocratic.”

The Republicans called for votes on a Monday when the House had been scheduled to conduct only pro forma business. With the usual heavy absenteeism it experiences on Mondays, it took Wright four hours to round up the minimum 218 lawmakers required for a quorum in the 435-member House.

Staff writer James Gerstenzang contributed to this story.