Clinton budget set for Senate OK Despite misgivings, legislators ready to approve economic resolution today

March 25, 1993|By Karen Hosler | Karen Hosler,Washington Bureau

WASHINGTON -- Try as it might to disguise it, the Senate i about to join President Clinton today in his crusade to sharply raise taxes in order to cut the deficit and finance new social spending.

With a final vote this morning on its version of Mr. Clinton's budget blueprint, the Senate will endorse raising taxes on Social Security recipients, imposing a new BTU tax on energy, freezing federal workers' pay and shifting spending priorities from defense to social programs.

The differences between the House and Senate versions of the budget resolution are so minor that a conference next week to produce a single plan will not need to make any major revisions of the Clinton blueprint. The resolution authorizes the government to spend $1.5 trillion in fiscal 1994 and lays out broad spending targets for the next five years. The president's ,, goal of reducing the deficit by about $500 billion over five years while raising taxes nearly $300 billion remains intact.

And even though wrangling will continue over weeks and months as the Clinton proposals are shaped into the actual legislation that will make them law, the conceptual battles are over.

"I think there's a clear message here that the Clinton program is in very good shape," said Sen. John B. Breaux, a Louisiana Democrat.

There was still some doubt yesterday whether the president's $16.3 billion stimulus package -- designed to create jobs through public works spending -- will fare as well when the Senate takes it up later today. Mr. Breaux and other conservative lawmakers were pushing for a compromise that would delay some of the spending until the fall, but the White House was resisting even that minor change.

Meanwhile yesterday, testifying before the Senate Finance Committee, Federal Reserve Chairman Alan Greenspan said he is worried that the budget deficit will soar again late this decade unless Congress cuts more over the five years covered by Mr. Clinton's program and more after that.

Mr. Greenspan had given strong and crucial backing to Mr. Clinton's proposal shortly after it was disclosed in February, and yesterday he said he remained encouraged by Congress' efforts to approve it. But he went on to say that Mr. Clinton's plan by itself was not enough to remove the structural forces that have caused the federal debt to grow over the last decade.

"I would argue strenuously that merely reducing" the deficit over the next five years "without addressing the period thereafter is not going to have the type of permanent effects that I think we need," Mr. Greenspan said.

The budget resolution's passage through the Senate has been smoothed in the usual fashion -- with a number of administration concessions to regional special interests.

New England senators will get a break for home heating oil on the energy tax when the details of the proposal are released shortly, administration sources said yesterday.

Senators from the Midwest earned a promise Tuesday from Treasury Secretary Lloyd Bentsen that ethanol, fuel made from corn, will be exempted entirely from the BTU tax.

Concessions for Western senators on grazing and mining fees and for the timber industry will be written into the budget resolution in the House-Senate conference, the administration sources said.

Mr. Clinton has already backtracked on a proposed 600 percent increase in the fuel tax on barges that ply inland waterways. That proposal offended just about everybody.

Administration officials caution that much of their work still lies ahead. For example, most of the details of how the proposed energy tax will affect each industry are still not known.

"You'd be surprised at how quick a senator who votes in favor of an energy tax in concept can vote against the bill when he sees the details of how it affects his state," said one Clinton aide who asked not to be named. "You won't see anybody in this administration getting cocky just because the budget resolution goes through."

But over the past week, the senators have talked their way through dozens of amendments to the budget resolution that tested sentiment on the most controversial elements of Mr. Clinton's proposal and found general, if sometimes heavily cloaked, support.

"I think the message to senior citizens is you better get ready to pay more taxes," observed Sen. Trent Lott, R-Miss., after his col

leagues narrowly defeated his proposal to put the Senate on record in opposition to an increase in the tax on Social Security benefits.

Mr. Lott and his allies complained that the tax increase violates Mr. Clinton's pledge to put most of the burden of higher taxes on the rich and imposes a double tax on the elderly.

The 52-to-47 vote against the Lott amendment marked the closest the administration came to losing a big one.

Four Democrats supported the GOP proposal: Dennis DeConcini Arizona, Howell Heflin and Richard C. Shelby of Alabama, and Bob Krueger, an appointee to the Senate who faces a special election for the Texas seat relinquished by Mr. Bentsen. No Republicans defected.

Democratic Senators Frank R. Lautenberg of New Jersey and Jim Exon of Nebraska offered a follow-up amendment that urges the Senate Finance Committee to "make every effort" to exempt middle-income Social Security recipients from the higher taxes.

Mr. Clinton's proposal would affect single people earning at least $25,000 in outside income and couples earning at least $32,000. The Lautenberg-Exon amendment, which passed, 67-32, would raise those limits to $32,000 and $40,000.

But it had almost no impact.

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