House passes plan to reduce budget deficit Measure would cut $490 billion over five years

October 28, 1990|By Peter Osterlund | Peter Osterlund,Washington Bureau of The Sun

WASHINGTON -- The months-long budget crisis appeared to have come to an end yesterday morning when the House of Representatives narrowly endorsed the most sweeping deficit reduction package in U.S. history.

On a 228-200 vote, bleary-eyed lawmakers capped an all-night session and backed a package that would increase a variety of taxes and trim spending on a number of benefit programs, including Medicare. Voting yes were Maryland Democrats Beverly B. Byron, Benjamin L. Cardin, Steny H. Hoyer, Tom McMillen and Kweisi Mfume and Republican Constance A. Morella. Democrat Roy P. Dyson and Republican Helen Delich Bentley voted against the bill.

CThe bill, the core of a plan to shave $490 billion from the federal deficit during the next five years, was to be debated in the Senate yesterday, and a final vote there was expected last night.

"The American people have had enough of fooling around with the line that somehow we can confront the deficit and it doesn't involve pain and doesn't involve sacrifice," said House Budget Committee Chairman Leon E. Panetta, D-Calif. "The fact is that it does, and that's what this package is all about."

The House's action followed a day of intensive final deliberations among congressional budget negotiators and of nervous vote-counting by congressional leaders in both chambers. Once final agreement had been struck Friday afternoon, House leaders pushed for a speedy vote, in part because they feared the tenuous support for the measure might erode as the hours passed.

"Once you think you might have the people, you move," said Representative Bill Richardson, D-N.M., one of an army of Democratic "whips" who spent the day corraling votes. Congressional leaders expected the Senate to follow suit yesterday evening. "I certainly think we have the votes in the Senate to pass it," said Sen. Lloyd Bentsen, D-Texas, chairman of the Finance Committee.

President Bush, who abandoned his no-new-taxes pledge to cut a deficit deal with congressional Democrats, is expected to sign the bill into law. That action will enact the second-largest tax increase in U.S. history. It also was expected to avert last night's scheduled shut-down of the federal government, which would have been triggered at midnight after the latest in a series of stopgap money bills expired.

The weekend's events were concluding a grueling chapter of modern political history. This year's budget crisis was at least a decade in the making, as the yearly gap between federal receipts and expenditures accumulated and the nation's total debt assumed staggering proportions. The deficit grabbed the attention of the nation's elected leaders this year when it became apparent that a softening economy and the soaring cost associated with the federal bailout of the nation's failing savings and loans would inflate the government's spending shortfall to record levels.

White House officials spent more than four months negotiating a budget deal with key members of Congress in a special "budget summit," only to have a majority of Democrats and Republicans in the House reject their handiwork.

In the process, conservative Republicans in Congress became disaffected with the president for negotiating a deal that increased taxes and, they believed, failed to effect significant reductions in spending. Liberal Democratic members accused their leaders of ceding too much to the president in the way of spending cuts, without demanding in return sufficient tax increases on the wealthiest Americans.

The bill passed by the House yesterday morning, however, built on that defunct budget agreement, reaching deeper into the wallets of almost all taxpayers than the original accord, while softening the impact of its contemplated spending reductions. It was passed with the support of 46 of the chamber's 175 Republicans. The measure would raise taxes by $137.2 billion over the next five years, increasing the 9-cent-a-gallon gasoline tax by 5 cents, doubling the beer tax to 32 cents a six-pack, raising taxes on wine and liquor and imposing a luxury tax on expensive cars, airplanes, yachts, jewels and furs. It would also charge the lion's share of the cost of deficit reduction to the well-off. The legislation would raise the top tax rate paid by the highest wage-earners from 28 percent to 31 percent, while limiting itemized deductions and gradually eliminating personal tax exemptions for people over the $100,000 income level. Restraints in spending on Medicare, Medicaid, farm subsidies and other benefit programs provide the balance of the bill's deficit reduction, bringing the total deficit cut to about $240 billion. Over the five year period, Medicare spending, for example, would be reduced by about $44 billion from levels that would be in effect without the bill.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.