Dole Calls for Bipartisan Panel to Seek Budget Reform

Kansas Sen. Bob Dole, admitting to Republican governors that Congress may be incapable of producing a major deficit reduction package, called Tuesday for creation of a bipartisan commission to “cut through the paralysis of politics” and recommend “real reform.”

New York Rep. Jack Kemp, one of Dole’s rivals for the Republican presidential nomination, promptly labeled the commission idea “absurd” and said it illustrated lack of leadership.

Vice President George Bush, who, as had Dole and Kemp, spoke separately to the 24 Republican governors, did not comment on Dole’s proposal. But he did criticize the refusal of his presidential rivals to endorse the pending U.S.-Soviet treaty banning intermediate-range nuclear missiles. “I am, frankly, astonished,” Bush told the governors.

Dole later told the state executives that he and other senators have “big concerns” about verification of the treaty, among other things, and noted that they have not seen the proposed pact.

However, the federal budget deficit occupied most of the governors’ attention at the end of their annual two-day conference here.

Signaling a clear lack of enthusiasm for the $76-billion, two-year deficit reduction agreement reached last Friday by President Reagan and congressional leaders, the governors unanimously adopted a resolution calling for its passage “without delay”--but also urging a “more ambitious long-term solution.”

“There is clearly room for further substantial spending reductions, and we urge the Administration and the Congress to address the basic structural problems in the deficit now,” the governors asserted. “Those basic problems require that all spending programs be further examined.”

Any long-term solution, they added, should include line-item veto authority for the President and a constitutional amendment requiring an annual balanced budget.

Even Gov. George Deukmejian of California, a loyal supporter of the President on most issues, was not yet ready to fully endorse the deficit reduction package, which includes $23 billion in new taxes and $53 billion in spending cuts over a two-year period.

“I would like to know whether in the compromise package there’s some verification method to show that the (new tax) money’s going to be used to reduce the deficit and not simply spent on increases in existing programs,” Deukmejian told reporters.

“We’re very concerned about verification in terms of the arms control agreement we’re negotiating with the Soviet Union. I think we have to be concerned with verifying what’s going to happen to any (tax) increase . . . . If it’s going to be used to reduce the deficit, fine, I think the American people would support that.”

However, a recent nationwide survey by the Los Angeles Times Poll found that nearly two-thirds of the public opposes raising taxes even to reduce the federal budget deficit. And the voters’ anti-tax sentiment clearly was reflected in the positions of the three GOP presidential candidates here.

Bush said: “We ought to hold the line on taxes.”

Kemp, denouncing the deficit reduction package as “a hoax--it’s smoke and mirrors (and) embarrassing,” called for cutting the capital gains tax by half.

And Dole, although cautiously leaving open the door to some “loophole closings” and “user fee” hikes, said he opposes any increase in income tax rates.

But Dole expressed doubt that Congress ever will be able to develop the kind of long-term deficit-cutting package that would satisfy the governors and Wall Street. “Maybe members of Congress just can’t put it together,” the Senate Republican leader conceded.

Dole said he was “borrowing a page” from Democratic New York Gov. Mario M. Cuomo in proposing that a national bipartisan commission be created to recommend a solution to the deficit. He explained that Cuomo earlier had suggested the idea.

Dole said it should be “an independent, high-powered task force designed to cut through the paralysis of politics to get to the root of our economic difficulties and to give us some long-term recommendations that will produce real reform.”

The panel could be modeled after a 1982 commission--also created during an election year--that recommended long-term solutions to Social Security financing.

Like that earlier commission, Dole said, the deficit reduction task force would not report its recommendations until after the election. And its suggestions would be available to the next President.

Kemp, in an indirect swipe at Dole, later told reporters that leadership “is knowing what needs to be done and doing it.” A commission would be “a big mistake,” he said, because it undoubtedly would include “Wall Street types” who wanted to raise taxes.

Deukmejian, when asked about the commission idea, said he was “sorry to hear” a congressional leader admitting “that Congress is not capable of dealing with this . . . . But if that’s what it takes, it’s probably something we might want to try.”