Budget pact still facing serious obstacles in House GOP conservatives may block passage

October 04, 1990|By Stephen E. Nordlinger and Peter Osterlund | Stephen E. Nordlinger and Peter Osterlund,Washington Bureau of The Sun Karen Hosler of The Sun's Washington Bureau contributed to this article.

WASHINGTON -- On the eve of a crucial vote, the administration and House Democratic leaders expressed cautious optimism yesterday that the $500 billion deficit reduction package will clear the House, but the White House said President Bush had yet to win over the necessary votes.

Budget Director Richard G. Darman told reporters, "I simply do not believe it will fail."

"Right now they [House opponents] are well ahead, we have a long way to go," he said, but he emphasized "we still have 24 hours" to turn it around.

House Speaker Thomas S. Foley, D-Wash., told reporters, "That's my intuition, that when the vote comes there will be a majority of both parties."

As the White House stepped up its campaign to pass the package, important support came from Federal Reserve Chairman Alan Greenspan.

Testifying before a House subcommittee, Mr. Greenspan called the package "a credible, enforceable reduction in the budget deficit."

"Failure to enact the agreement would . . . be a grave mistake," he said.

Asked whether congressional approval of the package would exert downward pressure on interest rates in the market, Mr. Greenspan replied, "most certainly."

In what is shaping up as a cliffhanger, House leaders said the Democrats intend to hold back their votes en masse until 89 House Republicans -- a majority of the GOP members -- vote in favor of a package that includes unpopular increases in gasoline, wine and beer taxes and a large increase in costs to millions of Medicare beneficiaries.

Democrats complained about the regressive nature of the excise tax bite and the Medicare provisions, and Republicans objected to the $133 billion in tax increases.

With his prestige riding on the outcome, Mr. Bush canceled a fund-raising political trip to New England to continue trying to line up support for the budget agreement.

The president appeared to be making progress at White House meetings with Republicans and on the phone.

"I have moved from leaning 'no' to feeling undecided," said Representative Robert L. Livingston, R-La., as he left the White House. "So he has swayed me to that extent."

The votes in the Senate appeared assured, said the president's spokesman, Marlin Fitzwater, but "we don't have the votes yet" in the House.

The administration faces strong House opposition because all members are up for election in a month.

House Republicans, out of frustration borne of their long-held minority status, also have been inclined to rebel at times against White House leadership to display their independence.

Representative Newt Gingrich, R-Ga., a leader of the conservative wing rallying opposition against the budget deal, told a news conference yesterday: "I've had members walk up to me and say they've gotten so many phone calls from their districts against the package that they don't know if they can stay with it."

Fresh trouble for the agreement boiled up early yesterday when a key House member, Representative Dan Rostenkowski, D-Ill., tried to persuade Democrats at a caucus to adopt a major change in the package on grounds that the proposed business investment tax breaks would revive tax shelters ended by the 1986 tax overhaul law.

Administration officials strongly opposed the effort by Mr. Rostenkowski, chairman of the Ways and Means Committee. They feared it could scuttle the entire agreement worked out over eight months.

A defeat in today's vote would kill the package and threaten more than $100 billion in across-the-board spending cuts that were narrowly averted earlier in the week when the administration and congressional leaders agreed on the compromise.

But approval of the package coming before the House and Senate this week would not seal it into law.

The agreement would still have to be cast into legislation, including massive final details, before it could take effect. The congressional leadership hopes to complete this process by Oct. 19 to avoid the across-the-board cuts that day.

While the package is unpopular across Capitol Hill, it is the threat of these automatic cuts affecting basic programs such as air traffic control and meat inspection that is driving support for the agreement.

Mr. Darman, the budget director, said the agreement was being "sold as a package" with no changes acceptable at this point. But he said the administration, after consulting with congressional leaders, might be open to some "reasonable" changes later.

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