Radio Talk Criticizes Wright’s Proposal : Reagan Rejects Move to Delay Tax Cuts
WASHINGTON — President Reagan on Saturday rejected any move to trim the national budget deficit by delaying the second-stage cut in top-bracket income taxes, as proposed by Rep. Jim Wright (D-Tex.), the newly elected Speaker of the House.
Wright suggested last week that funds to cut the deficit could be raised by keeping next year’s highest tax rate in place for a second year.
“We know where that road leads,†Reagan said in his weekly radio talk, delivered from the Oval Office. “First they take one step toward raising taxes, and then another, and then another, and pretty soon every family in America is paying more to the government again.â€
Doesn’t Name Wright
Reagan did not name Wright in the broadcast. He also did not mention the Iranian arms scandal that was the topic of his talk last week. Instead, the President avoided foreign affairs and focused on his plans and hopes for the budget for fiscal 1988, which he will submit to the newly elected 100th Congress that convenes Jan. 6.
For the first time since he took office in 1981, Democrats will control the Senate, as well as the House.
“The leadership of the 99th Congress gave America lower tax rates and began the process of putting the lid on spending,†Reagan said, challenging the leadership of the 100th Congress “to build on that record and help lead America into the future.â€
Reagan credited the tax cut Congress enacted at his request in 1981 with launching “48 straight months of economic growth†and an upturn in real incomes.
The tax revision bill enacted last summer by the 99th Congress “will help you and all Americans build on that record,†Reagan said. That measure, he said, “will cut the top rate from 50% to 28% and for eight out of 10 Americans will mean a top rate of no more than 15%.â€
Reagan ‘Disappointed’
Reagan said he was “disappointed this week to hear some talk from the new Congress that we should stop the climb, turn around and start back in the direction we’ve come from.†He said some members, whom he did not name, “are talking about breaking faith with the American people and taking back part of tax reform before it has taken effect.â€
Next year, a cut in the top rate to 38.5% on high-bracket incomes is scheduled to take effect. The tax revision law then sets a 28% top level for the second year, but imposes a surcharge that brings to 33% the effective marginal rate on some high incomes.
The approach suggested by Wright after his election to the speakership would not affect the first reduction, but would defer the second cut, unless the deficit for the next fiscal year shrinks to the $108-billion level set as a target by the Gramm-Rudman deficit reduction law.
The President called on Congress to cooperate with him in controlling spending. Finding good news in his Administration’s budget forecasts, he conceded that the new budget will be the first in history to exceed $1 trillion, but said the deficit will be $50 billion below last year’s when the current fiscal year ends next Sept. 30.
The new budget “will be lean enough to meet the Gramm-Rudman deficit targets, but it will also meet the government’s commitments,†Reagan said. He did not mention defense spending, which officials expect to be set at about 3% above the current year’s level after adjustment for inflation. But he said the new budget will allow “more than ever before in such areas as support for America’s elderly, law and drug enforcement to protect America’s young people, and health care for America’s finest, for our veterans.â€
Sees Spending Cut
Without specifying the cuts that will be required to continue the process of deficit reduction, Reagan predicted that “after taking out for inflation, the federal government will spend less in the coming year than it will this year.â€
Spending is tentatively estimated at $1.02 trillion, with $912 billion in revenue, leaving a projected deficit of $90 billion.
In a reference to delays that stalled action on the 1987 budget so badly that the 99th Congress had to pass a stopgap measure so it could adjourn, Reagan called on the new Congress to work “to meet its required deadlines and not let them slip by, as has happened too many times in the past.â€
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