Democrat OK of Spending Cuts Linked to New Taxes

Democrats must agree to major spending cuts as the price for President Bush’s concession that taxes will have to be raised to attack the budget deficit, a leading Senate Republican said today.

Sen. Pete Domenici (R-N.M.) made the remark on CBS-TV’s “CBS This Morning” as negotiators from the White House and Congress resumed their deficit-reduction negotiations.

“It’s time to summit or get off the pot,” Sen. Phil Gramm of Texas, a Republican bargainer, told reporters as the closed-door talks got under way.

Bush said Tuesday that a budget pact will require “tax revenue increases,” which Democrats hailed as an abandonment of his “no new taxes” campaign pledge. Domenici, the ranking Republican on the Senate Budget Committee, said the key question is not whether GOP lawmakers will back the President’s new position.

“It’s whether Democrats will now restrain spending enough to make a package that is indeed right for America,” he said.

On the same program, the chairman of the House Ways and Means Committee said increased excise taxes will have to be part of any deficit-reduction package.

“Excise taxes are going to be necessary in the equation because you raise revenues immediately,” Rep. Dan Rostenkowski (D-Ill.) said.

The government levies excise taxes on fuels, cigarettes, liquor and other items. Rostenkowski did not specify which tax increases he favors, but in the past has advocated boosts in gasoline, cigarette and alcohol levies.

House Minority Leader Robert H. Michel of Illinois today gave a cautious reading of Bush’s statement. Appearing on NBC’s “Today” show, Michel said, “The President didn’t tell us yesterday, ‘The first thing I want you to do is go down there and raise taxes.”’

But House Speaker Thomas S. Foley (D-Wash.), appearing on the same program, said that Bush, by his statement, “has said publicly and clearly that he believes new taxes are necessary.”

“There are going to be some hard hits,” Michel said. “The President is taking a hit for the moment, I think temporarily.”