President to Offer Tax Reform Guidelines : Move Not to Send Bill to Congress Is Effort to Win Broad Support

WASHINGTON â€”  President Reagan will send Congress a general “statement on principles of tax reformâ€� rather than a specific bill, the White House said Thursday, signaling that the Administration wants broad bipartisan support before it starts a tough political struggle to revise the tax system.

“We will be working with the Congress and watching whether the legislative track is clogged or unclogged and try to move as quickly as possible,� White House spokesman Larry Speakes said.

Although the President still views tax reform and deficit reduction as equal priorities, Speakes said, Reagan and his advisers will encourage congressional advocates of tax simplification to take the lead in preparing the legislation.

Lawmakers Cautious

On Capitol Hill, however, the sponsors of key tax reform bills were cautious, saying they are waiting for negotiations with the Administration.

“We’d like to see what the President wants to do before we sit down,� said Michael Wessel, legislative director for Rep. Richard A. Gephardt (D-Mo.). And John Buckley, press secretary for Rep. Jack Kemp (R-N.Y.), said: “The President has wholeheartedly endorsed tax reform and we’re looking forward to getting together� with representatives of the Administration.

To win congressional approval of deep new cuts in domestic programs and a continued defense buildup, the Administration needs strong support in Congress and from influential groups in the business community.

Backers Are Considered

White House strategists want to avoid alienating supporters on the budget issue, Speakes noted, and thus will move gingerly on controversial tax reform proposals.

Senate Majority Leader Robert J. Dole (R-Kan.), who must shepherd the President’s program on Capitol Hill, expressed strong doubts Thursday that significant tax reform is possible this year.

The President wants tax reform moved to “the front burner,� Dole said at a meeting of the American Bankers Assn.--but the senator suggested a lack of political enthusiasm when he observed: “I’m not sure the front burner is on.�

If Treasury Secretary James A. Baker III “is determined, maybe we’ll do some of it this year, but I’m still skeptical about how much,� Dole said. The majority leader wants Congress to concentrate instead on reducing the burgeoning federal deficit.

Reagan enthusiastically endorsed tax reform Wednesday in his State of the Union address, telling Congress: “Together, we can pass--this year--a tax bill for fairness, simplicity.�

He praised the Treasury Department’s tax proposal, which would lower the top rate for individuals from 50% to 35% and cut the corporate rate from 46% to 33%. However, he stopped far short of endorsing the specifics of the Treasury plan, which would cut total taxes on individuals by 8% while boosting tax revenues from business by 24%.

Congressional advocates of tax reform, while pleased that the President shares their belief in the need for lower rates and a simpler tax code, say some tough decisions must be made.

“Do we want to cut taxes for individuals and raise them for business, as the Treasury plan proposes, or do we want to keep the tax distribution the same as it is now?� an aide to Sen. Bill Bradley (D-N.J.) asked. The Bradley-Gephardt reform proposal would lower tax rates but retain the current relative burden for individuals and businesses.

GOP Awaits Word

On the Republican side, an aide to Sen. Bob Kasten (R-Wis.) said: “I’m assuming the people in the Administration are getting their ideas in line and that we will be hearing from them soon.�

It became clear Thursday, however, that the White House does not intend to send Congress a detailed tax proposal but instead will offer general guidelines aimed at achieving an agreement acceptable to Republican and Democratic congressional sponsors of tax simplification.

“Bipartisanship in this is very important,� Speakes said. And Deputy Press Secretary Marlin Fitzwater, who specializes in domestic issues, said “it’s likely that there won’t� be a specific piece of legislation on tax reform sent to Congress from the White House.

“We will be sending up a message to Congress, probably in February or March, that will form the basis for congressional consideration and a bill will be developed out of that,� he said.