Why Reagan switched signals on House leadership over the tax cut

President Reagan decided suddenly to change the game plan on his tax-cut battle with Congress simply because the House Democratic leadership was threatening to take the initiative away from him.

Mr. Reagan had been pushing hard for a coalition bill that would have brought the House leaders into compromise. And there was much evidence -- which Reaganites were hailing -- of these Democrats moving in the President's direction.

Furthermore, Reagan himself was making some concessions that indicated a compromise bill would be put together that would have avoided the kind of battle the President fought with the Democratic leadership of the House of Representatives over the budget.

So up to a certain point there was every reason to believe that the President and the House would in a matter of days thrash out an accommodation.

Then, almost out of the blue, the administration said the time for compromise was over -- that it would seek to win its three- year tax cut (5 percent first year, 10 percent for each of the two succeeding years) by wooing conservative Democratic congressmen as had been done in the budget skirmish.

Reason: In brief, the President came to believe that he was gravitating toward giving up too much too early.

Reagan, when governor of California, showed a liking for a tactic that had him fighting tooth and nail with the Legislature right to the end when he would usually sign whatever emerged from that body.

But now Reagan found himself reducing his original proposal in midstream -- from 10-10-10 to 5-10-10 -- and changing his original July 1 starting date for the first tax cut to the fall.

Reagan also perceived that negotiations with the House could go on so long that time probably would be running against his tax- cut position.

His advisers said there must be swift action or else public resistance to a three-year plan might grow to the point that he might have to abandon it.

So, shifting direction abruptly, Reagan bade goodbye to possible agreement with Rep. Dan Rostenkowski (D) of Illinois and his tax-writing Ways and Means Committee -- and with the substantially liberal element that still controls the House.

Now that the President moves from sweet persuasion -- at least with the House leadership -- toward political hardball, observers here are asking, will it work again? Those in the administration who count potential votes concede the fight to pull House conservatives to its side, while holding onto Republicans, will be much more difficult than in the struggle over the budget.

White House chief of staff James Baker III told reporters, "We need all our Republicans and 27 Democrats." He said that, as of the moment, the administration was certain only of 15 to 20 conservative Democrats.

Mr. Baker also said there "may be 10 to 15 Republicans that we need to do some work on."

So now the President goes all out to win a battle in which his three-year, 5- 10-10, across-the-board approach is his central demand -- one which he says must not be diluted.

The President is engaging in an intense one-to-one personal lobbying effort.He also plans to go to the people with a major television address in which he will ask that pressure be put on congressmen to support his tax-cut plan.

Meanwhile, Reagan expects the Senate to vote out a bill that will embrace his present tax proposal. Thus, should he lose his fight in the House, he is hoping that the final bill would be reshaped, in a Senate- House compromise committee, in the direction of legislation more acceptable to him.

The President is known to believe that he had a good chance of winning his battle with House leadership but that a final Senate- House compromise bill probably would be better for him than whatever legislation might ensure if he continued to try to work out a compromis e with the House leadership.