The Troll

In the old bedtime story, the three Billy Goats Gruff wanted to cross a bridge to a tempting green pasture, but were stopped by the troll who lurked underneath. Last week Speaker Joe Martin and his congressional captains looked longingly at the pasture labeled excess profits tax extension, where a succulent $800 million in revenues lies waiting. The President had insisted that Congress extend EPT for six months from its July 1 expiration in order to keep up sagging revenues. But extension depended largely on the attitude of the Ways & Means Committee, and guarding the committee was a gruff old troll named Dan Reed.

No Lobbying. Reed and most of his committeemen were adamantly opposed to EPT extension, even for the six months (to Jan. 1) asked by the President. Most U.S. taxpayers outside the unlimited expense-account belt were inclined to agree with Reed because EPT is a cumbersome, debilitating tax. Even the Administration's tax experts agreed that EPT should die--but not until next January (when it will be good politics to reduce income taxes along with the demise of EPT).

After considerable backstage wheedling, Joe Martin got Dan Reed to open hearings on EPT (TIME, June 1). But the hearings last week turned out to be farcically one-sided. Treasury Secretary Humphrey, instead of fully arguing the merits of the extension, was forced to defend himself against charges of lobbying for the bill. He admitted that he and Under Secretary Marion Folsom had spoken to officials of the National Association of Manufacturers and the U.S. Chamber of Commerce (both have stuck to their stand against EPT extension). Nearly all the witnesses summoned by the committee turned out to be against the extender; the respected Committee for Economic Development, pro-EPT extension, had its invitation canceled.

No Amendment. Old Troll Reed was on guard at the byroads, too. Afraid that the Administration might try hitching a makeshift EPT rider to the Reciprocal Trade Agreements Extension bill, Dan simply bottled up the reciprocal trade bill in his committee. The committee, said Dan, was "too busy" to deal with the bill-until the White House and congressional leaders gave their word that they would permit no such trick amendment. Dan won. "At my request," he announced last week, "I have now received airtight assurances from the White House, from the Senate and House leadership, that they will oppose any attempt ... to amend trade agreements legislation with an extension of the discriminatory and unfair excess profits tax." Then he found he was not too busy after all to call a committee meeting on the trade bill.

This week Joe Martin called a meeting of top Republicans to consider means of getting past Dan Reed. Dan offered one possible compromise: extend EPT just three months, to Oct. 1, and then cut EPT and personal income taxes together (three months ahead of Administration schedule). The Administration cocked an anxious ear because it looked more and more as if there were no prospect of getting all the way across Reed's bridge.

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