The King's Bill

By the time the U.S. Senate got through with it, the 1962 tax revision bill was not even a kissin' cousin to what the Kennedy Administration originally asked for. The Senate Finance Committee made precisely 174 changes in it, and most of them were upheld on the Senate floor. Viewing the ragged remnants, Treasury Secretary Douglas Dillon swallowed bravely, insisted that the bill was still "a significant first step toward the reform of our present out moded tax laws." But maybe Wisconsin's Democratic Senator William Proxmire put it better. Said he bitterly: "It certainly is not a Kennedy bill. No one could call it a Dillon bill. This is the bill of the distinguished Senator from Oklahoma, the very able uncrowned King of the Senate, Rob ert S. Kerr." Snarled Lines. Bob Kerr, second-ranking Democrat on the Finance Committee, took over the floor management of the bill after Chairman Harry Byrd. patriarch of Democratic conservatism, objected to the revenue loss involved in its 7% in come tax credit for industries that invest in new machinery. In eight days of slashing, sarcastic debate. Kerr beat off every significant attempt to alter the bill. In a hopeless snarl of party lines, such Democratic liberals as Illinois' Paul Douglas, Oregon's Wayne Morse and Tennessee's Albert Gore found themselves arrayed against President Kennedy. Alongside them were Byrd and such steely Republican conservatives as Arizona's Barry Goldwater and Delaware's John Williams.

None of this seemed to bother Kerr. Although he was often irrelevant, he was always interesting. He hemmed through Kipling's Recessional, hawed through the parable of the talents--and needled the liberals unmercifully. "I have great affection for the Senator from Tennessee," he cooed at Gore. "He and I have a great deal in common, including bull--that is, Angus bulls."* When he successfully escaped from a semantics trap baited by Douglas, the Illinoisan tossed him a barbed Plutarchian salute: "We will meet again at Philippi." Cracked Kerr: "I hope we will meet in Washington before that." Occasionally, Kerr got as good as he gave. When Gore referred to "the liquidity position of the U.S. corporations," Kerr loftily called for a dictionary. Gore politely rephrased it: "Cash position," he said. "Oh," exclaimed Multimillionaire Kerr, "I know what that is." "I dare say," purred Gore.

Veto Hint. It was the tax credit that threw Democratic liberals together with Republican conservatives against the Administration. Kerr's stand against a move to kill the credit was supported, 52-30, with some vital help from Republican Leader Everett Dirksen (see cover story), who rounded up G.O.P. votes.

Dirksen, who was in the thick of nearly every fight on the bill, almost killed the entire package with his insistence on an amendment to permit self-employed persons to deduct up to $1,750 of gross income a year for payments to their own retirement pension plans--a proposal Kennedy hinted might bring a veto of the whole bill. To arguments that his provision should be treated separately, Dirksen replied: "If an egg is good, it is good whether it is served up alone or with a dozen other eggs; the measure is a good . egg." His amendment was tabled, 45-41, but only after he had extracted a promise that it be promptly considered on its own. A modified version passed the Senate the next day. An attempt by liberals to restore the Administration's plan for withholding taxes on interest and dividend payments was beaten badly, 69-20.

After the tax revision bill finally passed, it went to a conference committee that must compromise differences between the Senate version, which the Treasury Department estimates would reduce tax revenues by $210 million a year, and the House measure, which would increase revenues by $325 million. The biggest difference between the two bills is that the House version includes dividend and interest withholding.

* Kerr has an Angus herd of 7,000, including 450 bulls. Gore has no cattle, two bulls.

This file is automatically generated by a robot program, so reader's discretion is required.