The Michigan Daily-Friday, June 12, 1981-Page 11
Reagan rules out
compromise on
tax cut program
WASHINGTON (UPI) - President
Reagan, s mmoning leaders of
business and labor to the White House
to begin a new drive for his tax cut
program, vowed yesterday not to com-
promise on his call for a three-year, 25
percent reduction.
But deputy press secretary Larry
Speakes indicated the administration
has retreated from its "no com-
promise" stance on replacing federal
grants for specific projects with block
grants that would give the states spen-
ding discretion.
REAGAN HELD a morning meeting
with 14 labor union presidents, in-
cluding indicted Teamsters Union
President Roy Williams, and scheduled
a late afternoon reception for business
and government leaders.
He also met with his Council of
Economic Advisers to discuss the tax
package and international trade,
among other items.
Meanwhile, House Democrats at-
tacked President Reagan's tax cut
proposal, charging low-income workers
would actually pay more money next
year while some wealthy Americans
would save more than $20,000.
AN ADMINISTRATION spokesman
conceded the tax cut in its first year
would have such a disproportionate ef-
fect, but he maintained all tax brackets
would be reduced in the second and
third years of the plan.
For the second consecutive day,
Democrats on the tax-writing Ways and
Means Committee questioned John
Chapotan, assistant treasury secretary
for tax policy, about the Reagan
proposal. The panel's 12 Republicans
were conspicuously silent.
Chairman Dan Rostenkowski, (D-
Ill.), announced the panel will begin
drafting a tax cut bill next week for
passage by August.
DEMOCRATS FAVOR a two-year, 15
percent reduction with cuts aimed at
workers earning between $20,000 and
$50,000 a year. Reagan proposes a 33-
month, 25 percent across-the-board cut
in individual income tax rates.
The Democrats complained the
across-the-board approach would be
unfair to the poor, because they would
still feel the effect of rising Social
Security taxes.
On the average, workers earning
between $5,000 and $10,000 a year would
receive a $58 income tax cut in 1982 un-
der the president's plan, said Rep.
Donald Pease, (D-Ohio). But when in-
creased Social Security taxes are in-
cluded, he estimated the net effect
would be a $42 tax increase next year.
AP Photo
Waiting behind an 8-foot-tall fence, some of the more than 1,200 Haitian
refugees wait under the watchful eye of immigration officials. Today, a
federal judge will hear legal arguments about deportation proceedings
which could tell the fate of these hopeful refugees.
$80nm
LANSING (UPI) - Legislative
leaders and Gov. William Milliken
argued yesterday over ways to cover an
expected $80 million deficit in the
current budget, with one lawmaker
suggesting the state again raid a
recreational trust fund.
Prospects for a general budget-
cutting order - originally under
serious consideration by state officials
- dimmed as key Democrats strongly
opposed the directive.
Rep. David Hollister, (D-Lansing),
who heads the House subcommittee on
social services, said the governor told
the group he wants to avoid taking that
action.
MILLIKEN LAST issued an
executive order in May 1980.
The governor met with the leaders
and members of the House Ap-
propriations Committee behind closed
doors for about three hours. The group
hopes to come up with a solution to the
budget mess within 10 days.
"We said we aren't going to rush into
anything," said Appropriations Com-
mittee Chairman Dominic Jacobetti,
(D-Negaunee).
HOLDING UP action is the disparity
between House Fiscal Agency and state
budget figures. House aides feel the
state will have about $40 million more
on hand at the end of the fiscal year
than state budget officials.
"We don't think we're too far off,"
Jacobetti said, however.
Of the $80 million deficit, about $57
million is caused by skyrocketing
welfare caseloads resulting from the
state's continued high unemployment
rate.
LAST MONTH, officiajs cut June
illion deficit jolts state
welfare payments five percent, saving Jacobetti proposed making up the from the fund to cover
about $3.5 million. Aid to Dependent remaining deficit through bookkeeping budget deficit.
Children and general assistance changes and taking money from the "People have to eat, yo
payments already had been cut five Kammer Recreational Trust Fund. are we going to ge
percent below 1980levels. Jacobetti said the fund - originally recreitional areas whe
One option discussed was continuing created to purchase park land - is eat?" said Jacobetti, a lo
the five percent welfare cut through the being unexpectedly fattened by state environmental group
end of the fiscal year Sept. 30. Jacobetti revenues from gas and oil leases in nor- "After you take ca
backed this idea but Hollister would not thern Michigan. (welfare recipients,) the
yet go for it. THE STATE borrowed $26 million about recreation."
r last year's
u know. How
t land for
n you can't
ng-time foe of
Ps.
re of them
n you worry
Congress approves cuts
WASHINGTON (AP)-House and Senate commit-
tees have approved deep slashes in education and
social programs, including cutbacks in student loans,
school lunches and special impact aid for school
districts containing federal installations.
A reluctant House Education and Labor Commit-
tee, struggling to come up with a total of $12 billion in
cuts for fiscal 1982, tightened eligibility for guaran-
teed student loans, currently available to students
from families at all income levels.
THE MEASURE approved by the committee would
make such loans available only to students whose
families have annual incomes no higher than $25,000.
The Senate Committee on Labor and Human
Resources, also working to meet the goal of $12 billion
in cuts set by the Congressional Budget Office, would
allow loans to students whose families have more
than $25,000 income only if they can demonstrate
need.
Experts on the House committee said its measure
would reduce student loan spending from the current
$7.9 billion to $3.6 billion. It would make ineligible
about 1 million of the 3 million students who currently
receive such loans.
"TODAY MAY BE remembered by, hundreds of
thousands of students around the country as the Pearl
Harbor Day of education in the United States," said
Rep. Peter Peyser (D-N.Y.).
Democrats on the House panel made it clear they
would attempt to undo on the floor some of the cuts
they approved in committee.
"We are meeting against our wills, and we are
meeting with a gun pointed at our heads," said Rep.
Carl Perkins (D-Ky.), chairman of the committee.
"The majority of this committee does not want to
make these drastic cutbacks which are going to hurt
so many of our citizens. We are only making these
cuts because the House Budget Committee has said
that if we don't, they will."
"AND THE MAJORITY of this committee has
decided that we would rather fashion the cutbacks so
as to be least harmful, rather than to rely on the hard-
hearted actions of those who brought us to this
situation in the first place," Perkins said.
Perkins said he had received "an absolute guaran-
tee" from House Speaker Thomas O'Neill Jr. (D-
Mass.) and House Rules. Committee Chairman
Richard Bolling (D-Mo.) "that we will be ellowed
several votes on the House floor in order to reverse
some of the worst cuts."
While the Republican-controlled Senate committee
adopted the block-grant approach proposed by
President Reagan, in which federal control is
loosened, it_ exempted most major education
programs and insisted that funds be earmarked for
several big health programs.