Spending agreement ends shutdown Senate votes for 5-year plan to cut deficit

October 09, 1990|By Peter Osterlund | Peter Osterlund,Washington Bureau of The Sun

WASHINGTON -- The Senate, averting the threat of a broad shutdown of government operations today, voted 66-33 early this morning to adopt an anxiously awaited, five-year $500 billion deficit-reduction plan.

The endorsement of the budget outline followed a voice-vote passage of a stopgap spending bill providing the federal government with funds to operate normally through Oct. 19, during which time lawmakers are to craft the legislation needed to carry out the budget plan.

The stopgap spending bill was sent to the House, which had passed a slightly different version early yesterday, and approved, 362-3, shortly before 2 a.m. today.

It was immediately sent to the White House for President Bush's expected signature, meaning that the nation's 2.4 million federal workers would be able to return to work today and that the government's normal weekday functions would resume on schedule.

Both of Maryland's senators, Democrats Barbara A. Mikulski and Paul S. Sarbanes, voted for the budget plan, which the House had adopted early yesterday on a 250-164 vote.

It calls for higher taxes than did the now-defunct budget agreement unveiled eight days ago by Mr. Bush and congressional leaders but rejected Thursday by the House. The new, vaguely worded document also promised a smaller reduction in benefits than contemplated by the original budget pact and altogether blurred the issue of what kinds of taxes are to be raised.

That vagueness -- the plan's authors call it "flexibility" -- is intended to blunt the opposition that sank the first deficit-reduction agreement. The new budget outline demands no specific spending cuts and tax increases -- elements that led House members to reject the earlier pact -- and defers decisions on these items to the coming days.

"It gives the committee process the authority it needs to work out the specifics," said Senate Budget Committee Chairman Jim Sasser, D-Tenn. "It reduces the deficit by historic proportions over the next five years and gives Congress flexibility on issues and problems that have troubled members and constituents over the last few days."

Not all of the original budget agreement's supporters were so pleased with the tactic.

"I'm not going to sign on to this fill-in-the-blanks package," said Sen. Phil Gramm, R-Texas, who supported and helped write the first package. "This is the original pig-in-a-poke."

Before the spending agreement was reached, hundreds of thousands of federal workers had faced the threat of forced furloughs today. After the House rejected the bipartisan budget agreement early Friday morning, President Bush had vetoed an earlier stopgap bill providing the government with funds to keep it operating for an extra week.

That act shuttered federal weekend activities nationwide, and the president said he would not sign any stopgap legislation until Congress agreed on a comprehensive plan to shrink the deficit. Congressional leaders thus labored furiously through the weekend to come up with a plan, mindful of the full-fledged disruption of federal services that would occur today if they failed to meet the president's test.

Senate Republicans and Democrats huddled throughout the day yesterday, seeking to cobble together a bipartisan coalition in support of the plan and hammering out the agreement on the stopgap money bill.

After it approved the budget plan, the House voted 305-105 to provide enough money for the government to function normally through Oct. 19 -- the date by which lawmakers would like to finish all budget business and adjourn for the year. The Senate's version required a new vote in the House.

Congressional Democratic leaders laundered the budget plan of the specifics contained in the original agreement that had compelled a majority from both Democratic and Republican ranks of the House to reject it Friday.

Nowhere to be found in the new proposal, for example, was the $60 billion Medicare reductions called for by the first agreement. Provisions calling for higher taxes on gasoline, home-heating oil, alcohol, tobacco and other items were also deleted.

Instead, lawmakers were told that the legislation implementing the budget agreement would pare Medicare savings to $42 billion and that the Medicare deductible paid by recipients for doctors' costs would rise from $75 to $100, instead of to $150 as in the old package.

Similarly, new taxes over five years could total $20 billion more than the $135 billion in the old package, although all decisions about specific spending reductions and tax increases were to be left to committees, which are to produce legislation implementing the plan in time for congressional passage by Oct. 19.

Lawmakers of both parties believe that the new budget plan, when implemented, will also result in a reduction in the capital gains tax rate in exchange for increased taxes levied on the highest income earners.

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