Tuesday, June 6, 1972

THE MICHIGAN DAILY

Page Nine

House unit defers tax reform

WASHINGTON ()1- Presi-.
dent Nixon's administration re-
fused to close tax loopholes this
year, but promised yesterday to
work with Congress in 1973 on
a comprehensive review of the
revenue code.
Officials took this position as
they asked the House Ways and
Means Committee to approve a
$15-billion temporary raise in
the national debt ceiling, to
$465 billion through. March 1
1973.
Backing up the request were
new estimates of budget defic-
its - $26 billion for the year
ending June 30 and $27 billion
for the following year.
These figures were an improve-
inent over earlier estimates but
partly because the government,

through miscalculation, is with-
holding too much income t a x
from individuals this year -
about $6 billion worth
However. Nixon's economic ad-
visers have wasrned that when
the Treasury begins refunding
the overw ithetd money. to tax-
payers next y r, the multibil-
lion dollar repayments are like
ly to have an unwanted and in-
flationary stimu lative effect. on
the economy.
In the imeantime, overwith-
holding causes an unintended
curb on consumer demand. Also,
government outlays in the first
half of this calendar year have
been smaller than Nixon plan-
ned; this also has held down the
business expansion and c o n -
tributed to the improved 1972

buget picture.
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favors tic' purpose
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Governors discuss
dele ate challenges

HOUSTON. Tex. OP) - Demo-
cratic state governors, worried
that their party's national con-
vention may again dissolve into
chaos, asked major presidential
candidates yesterday to settle
most of their proliferating dele-
gate challenges informally and
quickly.
Observers say the surprise re-
quest was aimed at Sen. George
McGovern, who headed here
from election-eve primary cam-
paigning in California and New
Mexico with the governors. They
are assembled for the bipartisan
National Governors Conference.
Sen. Hubert Humphrey h a d
planned to arrive tomorrow, but
supporters urged him to move
the trip up a day after the
delegate matters surfaced.
What worries the governors is
that roughly 500 Democratic
convention delegates are being
challenged, mostly by McGov-
ern supporters. This is roughly
half those chosen so far.
Mississippi Gov. William L.
Waller, whose regular Demo-
cratic convention delegation is
fighting in court to oust a rival
"loyalist" delegation from the
Miami convention, saidthe hopes
a dark horse candidate will win
the nomination. He said b o t h
McGovern and Humphrey have
taken positions "outside t h e
main stream of the American
voters and can't win in Novem-
ber." But Waller wouldn't go
so far as to say he'd - vote
against either of them if they
won the nomination. He said he
remains strictly "neutral."
Pennsylvania Gov. M i l t o n
Shapp, who engineered the dele-
gate peace mission, said unless
the trend is halted some dele-
gates in nearly every state will
face challenges.
"If the pace continues this
way, almost every member of
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the credentials committee will
come from a delegation that's
being challenged," Shapp said.
"We want to get some order out
of chaos."
Shapp said the party reforms
that sprang from the riotous
1968 Democratic Convention in
Chicago may have gone so far
and fast that next month's
Miami convention also will be
a mess.
Some governors don't know
how to interpret or apply new
rules requiring more women,
blacks and young people among
the delegates, he said.
Shapp and three other gover-
nors were appointed as an in-
formal committee of the Demo-
cratic Governors Caucus to ap-
proach candidates McGovern,
Humphrey, Sen. Edmund Muskie
of Maine, Gov. George Wallace
of Alabama and possibly others.
Their aim is to get the can-
didates to agree among them-
selves on how to dispose of as
many of the challenges as pos-
sible, especially those charging
relatively minor violations of rules
and to recommend solutions
jointly tothecredentials com-
nmittee that will decide whethear
or not the challenged delegates
are allowed to sit.

anxias to it down with t hi s
ommittee and work. on it next
year.
But Shultiz aid the ainiistra-
tion is flatly opposed to attach-
ing any tax-reform legislation
to the debt-ceiling bill for iti-
mediate consideration. as a
number of DemOcrats are pro-
posing.
He noted that, unless Congress
completes action on the legis-
lation by June 30, the debt ceil-
ing would drop automatically to
$400 billion. some $25 billion less
than the actual outstanding debt.
"Here it is June 5," Shultz
said. "The deadline is June 30
. . . To think we could do any
meaningful reviewa ofsthe re-
venue code in 29 days is out of
the question."
Mills' proposal to bring about
review of the revenue c o de
through a gradual repeal pro-
posal ran into sharper criticism
from the senior Republican
member of the Ways and Means
Committee, Rep. John Byrnes
of Wisconsin.
"You don't have to repeal a
law to study a law;" Byrnes
said. "I can't think of anything
more likely to disrupt confi-
dence just when business is get-
ting its feet on the ground."
Meanwhile top Treasury of-
ficials insisted that an inter-
nal memorandum in that depart-
ment that became known last
week was simply a study pap-
er, not the draft of a tax re-
form proposal.
The memorandum, by Asst.
Secretary Edwin Cohen, discus-
sed the effects of ending t h e
special low taxation of capi-
tal gains, but lowering the whole
rate structure to a maximum of
35 per cent.

TREASURY SECRETARY John Connally, left, and President
Nixon discuss the secretary's upcoming round the world tour,
which may take him to South Vietnam and Bangladesh, at Nix-
on's Key Biscayne home.
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