Gramm-Rudman Is the Key to Reducing Deficit, Congressman Tells Irvine Group

Blaming a “politically paralyzed” Congress, House Ways and Means Committee Chairman Dan Rostenkowski on Monday told Orange County accountants and tax lawyers Monday night that Gramm-Rudman budget cuts are the only way to significantly reduce the federal deficit this year.

Speaking to a combined dinner meeting of several local professional organizations at the Airporter Inn in Irvine, Rostenkowski (D-Ill.) also refused to predict whether a House-Senate budget conference committee will retain a House-sponsored capital gains tax cut.

President Bush signed an order Monday night cutting federal programs by $16.1 billion after 11th-hour negotiations over the budget ended in failure.

The action may be symbolic, however, since congressional leaders have said they plan to restore funding for government programs and agencies as soon as a compromise on deficit-reduction efforts is reached in the next few weeks or months.

The Senate budget bill has no capital gains tax cut or other so-called special interest items in it, but the House version does.

Speaking to about 500 people Monday night, Rostenkowski said, “We ought to let those (Gramm-Rudman) cuts go into effect . . . because they can result in more real deficit reduction than we will ever achieve under the budget-reconciliation bill that we will produce this year.”

Rostenkowski criticized Rep. C. Christopher Cox (R-Newport Beach) without mentioning him by name, saying, “It was your congressman” who voted with a House majority for the plan to restore funds cut by Gramm-Rudman pending further deficit-reduction efforts.

Chiding President Bush and Democrats as well as Republicans, Rostenkowski said Congress is “politically paralyzed” by fears of losing elections and by political “gamesmanship” played by both parties.

“The gap between the rich and the poor is increasing . . . but we simply refuse to pay for the government services we demand. The national debt is increasing by $50 million each and every day,” he said.

“The Democrats want Bush to fail. . . . The Republicans want the House to fail. Both strategies are totally bankrupt.”

Several people in the audience suggested that capital gains taxes should be indexed to account for inflation, but Rostenkowski said he could not persuade federal budget director Richard Darman or House Speaker Thomas S. Foley (D-Washington) to agree to that.

Rostenkowski spoke to a combined dinner meeting of the Newport Beach-Irvine and Orange County estate planning councils, the estate planning, probate, trust law and taxation sections of the Orange County Bar Assn., and the Orange County-Long Beach chapter of the California Society of CPAs.

ACTS--The President imposes $16 billion in automatic federal spending cuts because Congress has failed to meet its Gramm-Rudman target. A21