The Michigan Daily-Wednesday, July 22, 1981-Page 5

House panel OKs
three-year tax cut

WASHINGTON (AP) - The
Democratic-controlled House Ways and
Means Committee agreed yesterday to
give President Reagan a qualified ver-:
sion of the full three-year tax cut he
asked for.
The third year of relief would be
provided only if inflation were reduced
below six percent, a compromise
already rejected by the Reagan ad-
ministration.
THE COMMITTEE, trying to com-
plete work on its version of a tax bill,
approved the conditional third-year cut
on a 23-12 vote.
The panel has been advocating a two-
year tax cut with extra relief targeted
toward those with incomes under
$50,000 a year. Reagan wants a three-
year reduction with the same 25 percent
rate cut going to all, regardless of in-
come.
The committee's chairman, Rep. Dan,
Rostenkowski, (D-Ill.), suggested Sun-

day a compromise to allow the third-
year cut if the economy performs as the
administration forecasts. The
president's advisers rejected it im-
mediately.
REP. ANDY Jacobs, (D-Ind.), who
offered the amendment in committee,
billed it as "the take-them-at-their-
word trigger," meaning the third-year
cut would be triggered only if inflation,
the budget deficit and interest rates fall
as the administration predicts.
Under any tax-cut bill under con-
sideration, the first phase of the per-
sonal tax reduction would take effect
Oct. 1, and the second phase next July 1.
Reagan wants - and a majority of the
Senate appears ready to agree - on a
third-year reduction July 1, 1984.
If the economic conditions were met,
the Ways and Means amendment would
allow the third-year cut to take effect
Jan. 1, 1984.

U.N. urges swift end
to Mideast conflict

UNITED NATIONS (AP)-The'
Security Council voted unanimously
yesterday to give Israel and.
Palestinian guerrillas 48 hours to end
all armed attacks against each other
across the Lebanese frontier.
An American council source said the
48-hour limit was intended to allow
more time for U.S. diplomatic efforts
aimed at defusing the latest crisis. The
West originally proposed 72 hours.
PRESIDENT Reagan's special en-
voy, Philip Habib, now is in the Middle
East trying to arrange a cease-fire.
Western council sources refused to
speculate on what the council body
would do if its appeal was not heeded
within the time limit.
Arab delegates served notice they
would press for sanctions against
Israel, but the Reagan administration
has committed itself to blocking any
punitive measures against Israel. The
United States holds the right of veto as
one of five permanent members of the
council.
SECRETARY-General Kurt
Waldheim told the council that
Palestinian guerrilla leader Yasser
Arafat had agreed to a cease-fire,
"provided the other side also accep-
ted."
Waldheim, who had sent a personal
appeal to both sides, said efforts were
continuing to "secure a similar com-
mitment from the Israeli authorities.
In Jerusalem, the government of
Israeli Prime Minister Menachem
Begin authorized Habib to open contac-
ts with the Lebanese government "with
the aim of establishing peaceful
relations between Israel and Lebanon."
But the Israelis ruled out contacts with
Arafat's Palestine Liberation
Organization and retained the option
"to defend the citizens of Israel."
ISRAEL HAS justified its cross-
border raids on grounds of self-defense
against Palestinian "terror."
Last night, the Palestinian command
in Beirut reported that its forces had
clashed with an Israeli army column

advancing toward the Khardali bridge
near the Crusader-build Beaufort
Castle that is a-guerrilla stronghold in
the central sector of southern Lebanon.
It said the Israeli column included
about 25 vehicles and said "our forces
have engaged the enemy."
There was no immediate comment
from Israeli military authorities on the
Palestinian report.