White House Chief of Staff John Sununu says tax increases are "a possibility but no certainty" in the budget deal the Bush administration is trying to strike with leaders of Congress.
"It is a budget summit, not a tax summit," Sununu said Sunday as he sought to calm the storm over his earlier remarks indicating that the president had no intention of deviating from his no-new-taxes campaign pledge.Budget negotiations are scheduled Tuesday between top Bush administration officials and 21 of the most powerful members of the House and Senate.
The chairmen of the House and Senate budget committees indicated Sunday that gun-shy Democrats will insist that Bush take the lead in proposing any tax increases.
Rep. Leon E. Panetta, chairman of the House Budget Committee, said if there are any tax increases in the final package, it will be because Bush wants them there.
"I can assure you that the issue of taxes are not going to be raised or discussed or approved unless the president thinks that they're necessary for deficit reduction," Panetta said on CBS' "Face the Nation."
Sen. James Sasser, D-Tenn., chairman of the Senate Budget Committee, said he did not intend to be the first to suggest raising taxes "and I don't think the Democrats will."
Bush "would have to propose revenues. And the president would have to help sell those revenues to the Congress and to the American people," Sasser said on ABC's "This Week with David Brinkley."
Sununu, who appeared on NBC's "Meet the Press," told reporters last week that it was the Democrats' prerogative to put tax increases on the bargaining table "and it's our prerogative to say no."
Angry Democrats denounced Sununu's statement and expressed alarm at being drawn into a White House trap; the official White House spokesman, Marlin Fitzwater, disavowed the remarks.
Sununu said Sunday that reporters had mistakenly assumed "that there would be taxes . . . in a final budget. The fact is, there's no preconditions means there's a possibility but no certainty."
Richard Darman, the White House budget director, said, "we shouldn't consider a tax increase independently of major budget process reform."
Darman, speaking on the Brinkley show, said Bush would like to emerge from the summit with line-item veto authority - the ability to kill spending on specific projects or programs without striking down an entire appropriations bill.
Darman said the summit also should tackle the "phony" Gramm-Rudman targets for across-the-board spending reductions that apply only for the first 15 days of each fiscal year. "After Oct. 15th, anything goes," he said. "We want a tighter system for controlling that."
And Darman said there should be "some cap overall" on government loans and "hidden liabilities" for savings and loans and other programs.
"We're accumulating hidden liabilities . . . up to almost $6 trillion now," said the budget director.
Darman said a realistic goal for the negotiators is finding budget savings of $45 billion to $55 billion in the first year. Darman warned last week the deficit for fiscal 1991 could run as much as $100 billion over the $64 billion allowed by Gramm-Rudman.
"It's not going to be sensible to try to contract that much in one year," said Darman. "But let's say $50 billion."
Some possible tax ideas include:
-An income tax hike that could raise $18 billion in the first year.
-End the "bubble," which increases the tax rate for certain high income brackets from 28 percent to 33 percent, and tax top earners at 33 percent. This could result in $3.8 billion in the first year.
-Raising excise or "sin" taxes. Doubling taxes on cigarettes and alcohol could net the government roughly $3 billion to $4 billion in the first year.
-A $5-a-barrel oil import fee, which could raise $9 billion annually.
Other possible options include cutting entitlements like Social Security and Medicare, which combined account for almost 50 percent of federal spending.