REAGAN SAID OPEN TO DEAL ON 1988 U.S. TAX RISE
President Reagan is willing
to compromise with Democrats in Congress on a plan to raise new
federal revenues next year if they back his plan to reform the
budget process, White House Budget Chief James Miller said.
    "If the Democrats want to insist that the president say
whatever is agreed to is a tax increase, then they'd better
just forget it because he's not going to do that," Miller said
in an interview with Reuters.
    "But there are a lot of revenues other than those the
president proposed (in his January budget plan), I think, that
we might look seriously at," he added.
    The Reagan budget, which has been widely criticized by both
Democrats and Republicans in Congress, envisages raising 22
billion dlrs in new revenues through the sale of a package of
government assets and new fees on certain federal services.
    President Reagan has repeatedly vowed to veto any tax
increase voted by Congress for the 1988 financial year, arguing
that cutting domestic spending was a better way to reduce the
huge federal deficit.
    The deficit, which totaled 221 billion dlrs last year, is
expected to decline to about 175 billion dlrs this year and
would fall to about 140 billion dlrs next year under a budget
blueprint recently approved by Congress.
    The one trillion dlr congressional budget plan contains
about 19 billion dlr in additional revenues from new taxes in
the government's budgetary year beginning October 1.
    The plan does not say how the additional revenues are to be
raised, leaving it to the House Ways and Means and Senate
Finance committees to fill in the details later this year.
    Miller appeared to be signaling that the president might
consider some sort of tax increase despite his frequently
stated rejection of the concept.
    However, Miller declined to say which new revenue sources
might be acceptable to the president.
    "I think it would be counterproductive for me to (set out
options) which might suggest that we have one thing or another
in mind," the White House budget chief said.
    He cautioned Congress about the political repercussions of
certain moves, such as raising excise taxes on beer, cigarettes
or telephone service, or raising corporate or personal income
tax rates.
    "I think that those in Congress who think it will be a
simple matter to go along with some increase in excise taxes
are underestimating what they would be getting themselves into,"
he said. "What they don't really realize is that the political
opposition they are going to feel to excise taxes is going to
be a lot hotter tahn the political opposition to user fees, in
certain ways, or asset sales," he continued.
    "But there are a lot of other things and revenue issues in
government that probably ought to be addressed," he said.
    Before agreeing to a revenue package, the president would
insist on reform of the budget process, Miller said.
    "The president is not going to take a sucker punch. He's not
going to sit down and try to negotiate out a budget when we
can't be sure that whatever the president agrees to in fact
will be delivered," he emphasized.
    "We'd like to have a budget process that gives us a
contract, so that if the president agrees to something, he can
depend on its coming through."
    After returning to the United States from the economic
summit in Venice earlier this month, President Reagan revived
an earlier unsuccessful campaign for budget reform, calling for
a constitutional amendment requiring a balanced budget and the
power -- called a "line-item veto" -- to block individual items
in congressional spending bills.
    At the Venice summit, U.S. trading partners called on
Washington to cut its budget deficit to help reduce global
trade imbalances.
   
    Miller told an Italian journalist here yesterday that U.S.
trading partners "have to have faith and trust in the ability of
the United tates to deal with its problems."
    He said a deficit cut of about 40 to 45 billion dlrs a year
"is about the optimal rate of reduction in the deficit. I don't
think we can end the deficit overnight... I think we've got to
have a gradual reduction over a period of several years." 
Miller is in Beaver Creek attending the sixth annual World
Forum, a gathering of current and former government officials
and business representatives discussing world economic and
political issues.
 Reuter
