Rostenkowski Moves to Redirect Budget Debate With Tax Proposal --- Plan Would Increase Levies And the Top Rate While Holding Down Spending
WASHINGTON -- Chairman Dan Rostenkowski of the House Ways and Means Committee proposed an ambitious plan to raise taxes and to constrict the growth in federal spending, including Social Security benefits.</br></br>In a bold attempt to redirect the fiscal debate this year, the Illinois Democrat derided as politically expedient the growing interest among prominent members of both parties to cut taxes and to avoid making the hard choices that he said are needed to reduce the budget deficit.</br></br>Instead, he proposed to eschew all tax cuts, raise the top individual tax rate to 33% from 28% and freeze most federal spending programs, including Social Security, for one year. He also would raise taxes on gasoline, beer, wine, cigarettes and industrial pollutants, and would cut military spending by 3% from current levels. The goal of his five-year, $511.6 billion plan is to eliminate the projected budget deficit by the end of fiscal 1994 and create surpluses each year thereafter.</br></br>But the Rostenkowski plan, or even anything close to it, isn't likely to be enacted this year as long as President Bush opposes major tax increases and cuts in Social Security. On CBS-TV's "Face the Nation" yesterday, Mr. Rostenkowski acknowledged his plan is controversial. He said that he expected to be "verbally hazed by both Democrats and Republicans" and that the few colleagues he told about his plan asked, "Do you know what you're doing?"</br></br>What's more, efforts to cut taxes, especially President Bush's plan to reduce the tax on capital gains, have a good chance of passage this year over Mr. Rostenkowski's objections, according to Ways and Means aides. The capital-gains plan, which passed the House last year, is supported by a solid though narrow majority of the 36 members on Mr. Rostenkowski's own Ways and Means Committee.