But GOP Leader Sees ‘Firestorm’ in Congress : Dole ‘Will Probably’ Back Panel Budget

WASHINGTON â€”  Senate Majority Leader Bob Dole said Thursday that he will “take a hard lookâ€� at the budget approved by the Republican-controlled Senate Budget Committee over President Reagan’s protests.

But Dole said that he probably will reluctantly support it. And Reagan, he said, will find it difficult to persuade Congress to restore any of the $25 billion that the committee slashed from the defense spending proposals in the President’s budget.

‘I’d Hold My Nose’

The Kansas Republican, explaining why he probably will vote for the committee’s budget, approved in a 13-9 bipartisan vote Wednesday, said: “I don’t like it but I’m also the leader. I’d hold my nose, I guess.�

Dole said that Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) “really tried hard� to get committee approval of Reagan’s defense proposals but that several Republican members “don’t share the President’s views on defense.�

Domenici, he said, “was short three or four on the Republican side, and I don’t believe he had a single Democratic vote for anywhere near even 3% growth.�

The committee budget allows for no growth in defense spending beyond inflation and is far below the 8% after-inflation boost Reagan wants. Some critics say that it actually reduces military purchasing power.

Calls for Tax Hikes

In addition to reducing Reagan’s defense spending proposals, the committee budget also defies the White House by proposing nearly $12.5 billion in additional tax increases and ignoring many of the President’s proposals for cutting domestic programs.

Dole, in a wide-ranging breakfast interview with The Times’ Washington Bureau that touched on his presidential ambitions, as well as budget and tax issues, predicted that a proposal by Senate Finance Committee Chairman Bob Packwood (R-Ore.) to eliminate the deduction companies take for excise taxes will precipitate a “firestorm� in Congress.

Trucking, liquor and other interests that would be adversely affected by the tax proposal already are lobbying intensely against it, and several members of Packwood’s committee have opposed the measure on the grounds that taxes would be passed on to consumers, raising prices on gasoline, alcoholic beverages and other goods.

Proposal Seen as Crucial

Packwood has called the proposal--a key provision of a tax revision bill being drafted by the Finance Committee--�the engine that makes the rest of the bill possible.� Without the revenue it would provide or an immense equivalent source of revenue, he said, it would be impossible to meet the tax revision goal of replacing the current plethora of tax brackets ranging from 11% to 50% with just three rates: 15%, 25% and 35%.

The proposal would raise an estimated $62 billion over five years by ending business deductions for all excise taxes and tariffs and another $13 billion would be raised by higher wine taxes and by increasing other excise taxes.

Dole said that, while he does not believe that the proposal is dead, “I’m hearing from a whole new group of people who haven’t been in to see me for a long time, including Mr. Gallo (the wine producer) from California. He was in himself. . . . We’ve heard from the beer people and the wine people and the truckers and the gasoline people.�

Rather Pay Excise Taxes

His view, Dole said, is that “they’d rather just pay a little more in excise taxes� rather than lose the ability to deduct excise taxes. With the growing opposition to the proposal, he said: “It’s going to create quite a firestorm.�

While tax reform is a “great concept,� it is going to be “very difficult� getting it through Congress, Dole said.

The senator said there is “little excitement� for it either in the Senate or across the country. “The only excitement is among people who don’t want it,� he said.

On the budget issue, Dole said he hopes to have the Budget Committee’s proposal brought to the Senate floor for a vote before the chamber begins a two-week Easter recess next Thursday.

Meanwhile, House Budget Committee Chairman William H. Gray III (D-Pa.) said that his panel will await the outcome of the Senate vote before producing its own budget plan. He said it is likely that the Senate committee’s proposal will be dramatically changed once it reaches the Senate floor.

Dole, responding to a question about the 1988 Republican presidential nomination, said he believes that the race is “fairly wide open� even though Vice President George Bush “obviously has a big head start.�

Sees Chance in Michigan

“I’m not so certain that even in Michigan, where the Bush people are putting a lot of money and they’ve got the party leadership there playing hardball with everybody trying to line them up for Bush, that even that state is locked up,� Dole said.

It may be “awkward� to run for President while serving as Senate majority leader, Dole acknowledged, but he said it gives him a visibility that would help in a presidential bid. He said he believes his predecessor in that job, former Sen. Howard H. Baker Jr. (R-Tenn.), also a potential candidate for the GOP presidential nomination in 1988, made a political mistake by retiring from the Senate in 1984.

“Now he’s just sort of disappeared,� he said of Baker, who reportedly is making about $1 million a year working in Washington for a Houston-based law firm. “I’ve kidded him about he’s so busy running to the bank he can’t run for President because he’s got a good law practice.�