Clinton: Squeezing Past the Senate

June 27, 1993

President Clinton stayed deftly above the fray in squeezing his massive economic plan past the Senate by the margin of Vice President Al Gore's tie-breaking vote. It was a critical victory for the new administration after so many months of blunder. Now the showdown test comes in a Senate-House conference where trading and compromising will go on in full fury, with the White House as a very active third-player.

In its legislative tactics, the White House first made the crucial decision that the details of what came out of the Senate mattered a lot less than getting something -- anything -- passed. Its equally important move was to let the Senate Finance Committee have its say, despite its conservative leanings, rather than try to bypass the committee for a party-splitting battle royal on the Senate floor. Finally, the administration went along with fine-tuning and nose-counting to let Democratic Senators facing re-election off the hook on tough votes so long as the majority held.

In strategic terms, however, the administration lost the House-passed broad energy tax on the BTU or heat content of all fuels, a proposal that would have raised $72 billion over five years. Under pressure from oil patch senators, the administration settled for a 4.3 cents a gallon gasoline tax that will raise only $24 billion. This will not bring about the environmental improvements offered by the BTU tax. Moreover, the projected revenue loss sent the Senate scrambling in dubious ways to hold to the president's $500 billion deficit reduction goal.

House conferees are unlikely to restore the BTU tax. Perhaps the best they can hope for would be a companion ad valorem tax on electric utility bills so that some of the energy tax bite would fall on coal, natural gas, nuclear and hydroelectric power.

Another contentious issue arises from the Senate decision to add another $10 billion to the $50 billion cut in Medicare payments to doctors, hospitals and other health care providers approved by the House. The Senate Finance Committee actually had voted to raise the ante by $19 billion until a rebellion by liberals forced a retreat.

Differ as they do, the House and Senate bills ostensibly fulfil President Clinton's broad objectives. They hold down the size of federal deficits by taxing the wealthy and cut spending on

existing government programs, especially entitlement benefits, while launching some so-called economic growth initiatives. Republicans failed to attain deficit restraint solely through spending cuts but they did arouse public resistance to more taxes.

The real measure of what is being wrought is not to be found in the thousands of pages and hundreds of deals that make up the legislative package. It will be found in actual budget results over the next five years. And in light of repeated failures by the Washington Establishment, there can be no assurance Mr. Clinton's efforts will really succeed in putting the government's fiscal house in order.

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