White House Says Bush Still Backs Tax Talks

The White House, fearing that inflammatory comments by a senior official might torpedo the upcoming budget summit with congressional leaders, insisted Thursday that President Bush has not ruled out a tax increase.

The published comments, later revealed as having come from White House Chief of Staff John H. Sununu, suggest that the Administration wants to trap Democrats into proposing tax hikes that Bush plans to reject.

While disavowing Sununu’s comments, however, White House aides acknowledged that the remarks nonetheless reflected the views of an important faction within the Administration. Congressional Democrats, in turn, demanded that Bush publicly clarify his own position on deficit reduction and tax increases.

Meanwhile, House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) said that White House and congressional negotiators can avoid triggering severe across-the-board cuts in federal spending this fall only by producing a substantial multi-year package of tax increases and spending cuts.

“We face a very basic choice,” Rostenkowski said in a speech before the National Press Club. “Either we will all embrace a balanced budget package that includes some tax increases or we will confront unprecedented” automatic cuts under the Gramm-Rudman budget law.

Those cuts could take as much as $100 billion, or roughly 20% of budgeted spending, from affected defense and domestic programs, Rostenkowski said. “Gigantic is one of the words to describe it,” he said.

Aides to Rostenkowski said Bush has indicated privately that he recognizes the stark dilemma facing the federal government and has decided to accept some tax increases as part of an overall deficit-reduction package that would set aside the requirements of Gramm-Rudman.

The controversy of the day centered on Sununu’s comments Tuesday to a small group of reporters traveling with First Lady Barbara Bush and White House officials on a plane coming back from Costa Rica.

Speaking on condition that he not be identified except as a “senior Administration official,” Sununu said that Democrats are free “to put (taxes) on the table, and it’s our prerogative to say no. And I emphasize no.”

Sununu’s identity as the source of the comments was revealed because newspaper reports made it clear that the discussion took place aboard the White House plane. Sununu was the only senior Administration official on the trip.

White House Press Secretary Marlin Fitzwater, peppered by questions about the contradiction between Sununu’s statement that Bush would just say “no” to any tax proposals and the Administration’s position that there are “no preconditions” to the talks, disavowed the chief of staff’s comments.

Fitzwater described some of Sununu’s remarks as “crazy,” adding: “I can’t speak for everybody, but I do speak for the President, and I speak on the record. And I just talked to the President this morning at great length about this matter and I assure you that his position is that there are no preconditions.”

Fitzwater said Bush had made that point in a telephone conversation Thursday with House Speaker Thomas S. Foley (D-Wash.).

Top Democrats on Capitol Hill immediately denounced Sununu’s comments. But they avoided saying anything that might scuttle the White House talks, which are scheduled to begin Tuesday.

“We view this incident as an extremely serious one,” Foley said, “because it could, if repeated, threaten the success of any talks and we want these talks to succeed.”

All 11 Democrats involved in the budget negotiations said in a statement: “We reject the statements made yesterday by the President’s chief of staff. They were untrue, unfair and ill-timed. Gov. Sununu’s remarks directly contradict the President’s assurances to us and the statement issued yesterday by the White House.”

“It is time for the President to speak,” added Rep. Robert G. Torricelli (D-N.J.). “What is it that he would bring forward? The President waits, but the nation deserves to hear.”

The White House’s hasty retreat from Sununu’s comments reflected some confusion within the Administration over the question of whether to accept any kind of tax hike--but it also reflected a degree of orchestrated confusion.

If the budget negotiators decide that tax increases are unavoidable, the White House has carefully presented itself as entering the talks skeptical about such a potentially unpopular move. Meanwhile, by saying nothing on the subject in public since he began meeting with congressional leaders on the budget last Sunday, Bush has relied on Fitzwater to make it clear that he is not closing the door on any proposal--including new taxes.

Staff writers William J. Eaton and Paul Houston contributed to this story.