Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, July 28, 1990                   TAG: 9007280163
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-12   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

PLAN TO RAISE LIQUOR TAXES, CUT DEDUCTIONS SPLITS GOP

At the same time, the GOP accused Democrats of not being serious about their budget talks.

Bush, who met with both parties' negotiators Friday morning, told reporters, "I think we are narrowing some differences."

Republicans who asked not to be named said the White House proposal - not yet presented to Democrats - appeared to call for raising the tax on a 750-milliliter bottle of hard liquor from $1.98 to $2.54.

On Thursday, GOP officials said the administration's $54 billion package of taxes and program cuts would increase the federal tax on a six-pack of beer from 16 cents to 81 cents and from 3 cents to 76 cents on a 750-milliliter bottle of wine.

The White House also proposed limiting the amount of state and local income taxes that can be deducted on federal tax returns to $10,000, officials said. Almost everyone who would be affected by that plan earns more than $100,000 annually.

Rep. Jerry Lewis, R-Calif., the No. 3 House GOP leader, said Republicans are split over the alcohol taxes and the tax deductibility ceiling.

"A lot of members realize the regressivity of beer and wine taxes," Lewis said. "You're talking about a big wallop to that middle-income family."

Republicans were blunt in their criticism of Democrats.

"They can't muster the resolve to reduce spending," Gramm said.

Democrats seemed content to move slowly and not immediately produce an offer of their own.

"We're in no hurry," said Sen. Wyche Fowler, D-Ga. But he denied that Democrats were purposely laying back, saying, "All along we've tried to do the responsible thing."

With Congress' summer recess to begin in early August, some Democrats were privately chortling over the prospect of letting a month pass with the public focused on a GOP tax increase and spending cut plan.

Also on Friday, a Department of Health and Human Services advisory panel recommended removing Social Security from the calculation of deficit reduction targets to focus public attention on the deficit.

The Advisory Council on Social Security also recommended continuing the payroll tax rate at the current level to build reserves as a cushion for the retirement of 75 million baby boomers, which will begin around the year 2010.