Tax-Cut Plan Support Dips, Dole Says

WASHINGTON —  A growing number of Senate Republicans are developing serious doubts about the size of the GOP-proposed $245-billion tax cut, and it may well have to be scaled back, Senate Majority Leader Bob Dole acknowledged Sunday.

“There’s been some indication, even from conservative Republicans . . . that maybe we shouldn’t try to go all the way to $245 billion,” the Kansas Republican said on CBS-TV’s “Face the Nation.”

He added: “I’m hearing from a lot of sources on the Republican side--and not those who’ve said from the start that they thought . . . it was too much--but others who I’m frankly a little surprised by in the past couple of days.”

Dole’s comments suggest a major new development in the ongoing battle in Washington over how to balance the federal budget while restructuring Medicare and Medicaid.

Dole’s candid assessment of the diminishing enthusiasm for the current tax-cut proposal among GOP senators comes after weeks of unrelenting Democratic criticism that such a cut is misguided in light of the GOP’s plan to curb Medicare and Medicaid growth by $452 billion over seven years. A likely compromise would be a smaller tax cut in exchange for less severe reductions in the growth of Medicare and Medicaid, the huge health care programs for the nation’s elderly and the indigent.

But if Senate Republicans were to abandon the $245-billion tax cut, they will be putting themselves on a possible collision course with their counterparts in the House, which has already passed the tax cut. The Senate Finance Committee has yet to take up the tax-cut issue.

As it is, there is little love lost among many House Republicans and their colleagues in the Senate, which has been something of a burial ground for much of the House’s “contract with America.”

House Speaker Newt Gingrich (R-Ga.) was asked Sunday about the waning Senate enthusiasm for a big tax cut on ABC-TV’s “This Week With David Brinkley.”

Noting that Senate Republicans earlier this year signed off on a budget resolution that specified a $245-billion tax cut, Gingrich said pointedly: “I think the Senate, frankly, is honor-bound to deliver on that.”

Gingrich predicted that ultimately “the leadership of the Senate will carry a tax cut . . . and we’ll be fine.”

The lawmakers’ comments come in the wake of another new dynamic in the congressional tax-cut battle, with the appointment Friday of Sen. Phil Gramm (R-Tex.) to the powerful Finance Committee, joining Dole on that panel.

Both men also are vying for the 1996 Republican presidential nomination. Gramm, a tax-cut fanatic, replaced Bob Packwood (R-Ore.), whose resignation from the Senate took effect over the weekend.

The tax-cut fever in Congress has had something of a roller-coaster ride this year. Shortly after the new Republican majority took power in January, a sort of “bidding war” to enact a big cut erupted, with President Clinton as well as many Democrats on Capitol Hill joining in.

But that sentiment has been on a gradually falling trajectory since. After the GOP disclosed its intention to curb Medicare growth by $270 billion, Democratic leaders in Congress fiercely latched onto that figure, connecting it to the $245-billion tax cut sought by the Republicans.

Until recently that Democratic contention did not seem to gain broad public resonance. But in recent weeks, various polls have suggested that the argument is beginning to take hold as the public--especially senior citizens--started to focus on the controversy.

At the same time, a group of conservative senators, led by Larry E. Craig of Idaho, has been meeting privately to discuss scaling back the tax cut, in part by reducing its scope to four--instead of seven--years.

During a Senate Finance Committee meeting on the GOP Medicare proposal last week, three Republicans expressed their doubts about the tax cut.

“I have never been for a tax cut for the rich or anyone else,” said Sen. Alan K. Simpson (R-Wyo.).

Sen. Alfonse M. D’Amato (R-N.Y.) said the Democratic attempt to link the Medicare growth reductions to the tax cut “resonates, and senior citizens are concerned. . . . It’s difficult to make the case that we are doing [Medicare revisions] to strengthen Medicare.” He added that he would have preferred to overhaul Medicare and Medicaid without mixing in “this business of tax cuts.”

Sen. Orrin G. Hatch (R-Utah) predicted that a tax cut of $245 billion simply will not happen.

The Finance Committee is expected to take up the tax-cut issue soon. Dole said Sunday that he intends to discuss the matter with Sen. William V. Roth Jr. (R-Del.), who succeeded Packwood as the panel’s chairman.

“We hope to have a meeting sometime this week. But there will be tax cuts,” Dole said, adding: “Will it be $245 billion? I’m not certain at this point.”

Pressed to be more specific, Dole quipped: “I’m not sure I want you to understand it.”

Also speaking earlier Sunday, Senate Minority Leader Tom Daschle (D-S.D.) repeated his long-held position: “As long as tax cuts are on the table, I won’t support a dollar in increases in [Medicare] premiums.”

Interviewed on NBC-TV’s “Meet the Press,” Daschle also said that Senate Democrats intend to unveil an alternative today to the GOP plan to reform Medicaid and Medicare. It would save $90 billion by the year 2002--enough to guarantee the immediate solvency of the program’s hospital trust fund, Daschle said.