Negotiators home in on gasoline tax House, Senate may reach deal today on amount

July 29, 1993|By Karen Hosler | Karen Hosler,Washington Bureau

WASHINGTON -- Congressional budget negotiators, aiming to complete a deal by tonight, appeared yesterday to be nearing agreement on a gasoline tax increase of about 6 cents per gallon.

All involved cautioned that their talks had reached a highly volatile stage, but they seemed inclined to follow the usual congressional practice of splitting the difference between Senate and House proposals.

The House-passed version of Mr. Clinton's budget proposal included a broad-based energy tax on the heat content of fuel that included a gasoline tax increase of about 7.5 cents a gallon. The Senate scrapped the broader tax but approved a 4.3 cents-per-gallon gasoline tax increase.

"We're trying to find the votes for 6 cents, though I would like to see 7," Democratic Rep. Dan Rostenkowski of Illinois told reporters last night. He

is chairman of the House Ways and Means committee and top House negotiator on the tax portion of the budget.

House negotiators want a higher gasoline tax to be able to spend more on social programs, including a tax credit for the working poor, tax incentives for investment in blighted communities and Medicare, the health care program for the elderly. The Clinton White House generally supports that view.

But Senate negotiators and conservative Democrats in both the House and Senate fear the political ramifications of any tax increase that affects the middle class.

A third element in play is Mr. Clinton's target of $500 billion of total deficit reduction over the next five years, a figure he believes is important symbolically to convince the financial markets the government is serious about reducing its debt.

Arkansas Sen. David Pryor, a close Democratic ally of Mr. Clinton and one of the Senate negotiators, said weighing those trade-offs would be the chief agenda for today's final negotiating session.

"We're going to look at each penny of gas tax: how much it buys and how many votes it loses," Mr. Pryor said.

Scrapping gas taxes in favor of spending cuts doesn't seem to be an option under consideration.

Many votes would be lost if the pendulum swings too far in either direction -- raising taxes or cutting spending -- and neither Senate nor House leaders have any votes to spare.

President Clinton and Democratic leaders are making an effort to find some means, probably outside the budget, of imposing spending curbs on automatic benefit programs.

Such a procedural change wouldn't be included in the budget because of parliamentary problems in the Senate. But Mr. Clinton is considering putting it in separate legislation or imposing it by executive order.

Democratic Rep. Timothy J. Penny of Minnesota, leader of a group of moderate Democrats who met with Mr. Clinton on the issue Tuesday night, said, "I came out encouraged by the degree of enthusiasm by the president for budget enforcement."

Jittery Democrats are still posturing mightily in hopes of affecting the final shape of the budget bill. But the budget conferees have moved so swiftly to find a middle ground on the hundreds of differences between their two bills that only a few central points remain in dispute.

Issues already settled include: an income tax increase on the wealthiest Americans that would take effect as of March 1 this year; a corporate tax increase to 35 percent from 34 percent; and an increase in the level of Social Security benefits that would be subject to taxes for individuals earning more than $32,000 and couples earning more than $40,000 a year.

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