Senate Democrats close to agreement on budget Clinton takes wait-and-see stand

June 16, 1993|By Karen Hosler | Karen Hosler,Washington Bureau

WASHINGTON -- After a week of public posturing and private pleading, Democrats on the Senate Finance Committee expect to agree today on a substitute for President Clinton's budget that includes a lower fuel tax increase, fewer tax breaks for business and deeper Medicare cuts.

The senators emerged from a 3 1/2 -hour private bargaining session last night saying that they had bridged their major differences and were only awaiting staff computations before striking a final deal.

But the agreement of these 11 Democrats, expected to be formally approved by the committee tomorrow, is designed primarily to get Mr. Clinton's $500 billion deficit reduction package through the Senate. Many of the details may get changed again at a joint conference with the House, where the final legislation is expected to be drafted.

"We're just tying up a few loose ends," said Sen. David L. Boren, an Oklahoma Democrat who raised the most objections to Mr. Clinton's original package.

"This is a three-act drama," observed Sen. Bill Bradley, a New Jersey Democrat, who has been pushing with mixed success to eliminate tax "loopholes" for business from the bill before cutting programs. "The question is: How do you end the day with what you want?"

In a news conference yesterday, Mr. Clinton stressed that he is not endorsing any specific details of the Finance Committee's version of his program and said that "the real test will be what happens in the [House-Senate] conference and what the final bill looks like that the House and the Senate will vote on."

Much of the Finance Committee's work over the past few days of closed-door meetings has been aimed at trying to figure out how to replace the $72 billion that would be lost by the elimination of Mr. Clinton's proposed tax on the heat content of fuel.

The president agreed not to press for approval of his Btu tax in the Senate after Mr. Boren and another committee member refused to support it.

Although the committee wrangling has been fierce and sometimes bitter, the Democratic senators say they are unanimous in their determination to produce no less than the $500 billion in deficit reduction promised by Mr. Clinton when the process began in February.

But many want to raise the 1-to-1 ratio of spending cuts to tax increases in the president's proposal, so that spending cuts would account for more of the mix.

By last night, a consensus had developed around a tax increase of about 5 cents a gallon on gasoline and other transportation fuels, additional cuts of $19 billion in the Medicare program for the elderly and the elimination of several business breaks, including incentives for locating in so-called "empowerment" zones. The empowerment zones are designed to attract businesses to economically depressed urban and rural areas.

The committee's Democrats, without the help of any Republican member, are also expected to:

* Raise the income levels at which Social Security recipients will be subject to higher income taxes, from $25,000 to $32,000 for individuals and from $32,000 to $40,000 for families;

* Reduce by as much as one-third a $28 billion program of income tax credits for families earning less than $30,000 a year; and

* Delay by six months an income tax increase on wealthy individuals so it would take effect July 1.

Senate Majority George J. Mitchell of Maine, who has been working with Finance Committee Chairman Daniel P. Moynihan of New York to help win an agreement, predicted the measure would be passed by the Senate next week.

Even so, much remained in flux last night as the committee members began their second bargaining session of the day, and the senators were still jockeying to get the best positions for their own pet interests.

"It's kind of like a Rubik's Cube process to work out how everything fits together," said Sen. Thomas A. Daschle, a South Dakota Democrat.

To some degree, the Finance Committee is working its way through the normal political dance of posturing and holding news conferences while pushing privately for the concessions that ultimately would accompany any tax legislation.

But the process has been made more difficult because the proposed tax increases and spending cuts are painful, no Republicans will agree to help out and Mr. Clinton has inadvertently encouraged senators under pressure from special interests to challenge him. "These people have all the political courage of worms," said Edwin Rothschild of Citizen Action, a consumer advocacy group.

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