Conferees aim for 4% gas tax rise Lower figure perils Clinton deficit goal

July 30, 1993|By Karen Hosler and Jeff Leeds | Karen Hosler and Jeff Leeds,Washington Bureau Carl M. Cannon contributed to this story.

WASHINGTON -- In a chaotic atmosphere of bluster, threats and relentless White House salesmanship, congressional budget negotiators broke last night predicting their final deal would contain a smaller gasoline tax increase than the administration had hoped.

The deal expected to be announced today would increase the gasoline tax by an amount closer to the 4.3 cents per gallon favored by the Senate than the 6 cents being pushed by the

Clinton administration, Senate negotiators said last night.

But it was unclear last night how the conferees would reach Mr. Clinton's target of $500 billion in deficit reduction over five years without the additional gas tax revenue.

Sen. Daniel Patrick Moynihan, the New York Democrat who serves as the chief Senate negotiator, quipped that he was relying on "magic."

Agreement today

Although the Capitol corridors were lined with legislators expressing their doubts about the fate of Mr. Clinton's economic program, momentum was steadily building toward completion of agreement today.

"The shakies are calming down," said Sen. John B. Breaux, a Louisiana Democrat, who has been active on the fringes of the budget deliberations.

He said his colleagues were drawing comfort from a new Wall Street Journal-NBC poll indicating that Americans' support for the Clinton economic plan has risen over the past month to 43 percent in favor compared with 39 percent opposed.

In even better news for the administration, the polls showed that voters would easily favor Democrats who supported the president over Republicans who opposed him.

"The bottom line is [that] these members . . . cannot afford not to pass this plan," said Leon E. Panetta, the White House budget director, who spent much of his day lobbying on Capitol Hill.

He was joined by Vice President Al Gore and Treasury Secretary Lloyd M. Bentsen, who are working furiously to make sure the deal reached by budget negotiators will be acceptable to rank and file Democrats. Successful passage is viewed as crucial to Mr. Clinton's presidency.

The president himself continued to work the phones yesterday, calling wavering members of the House and Senate to make his case.

The White House is planning an Oval Office address to the nation Monday to put additional pressure on the lawmakers.

Grumbling

But grumbling in the ranks continued to bedevil the White House, which cannot afford to lose a single vote in the Senate, where the original budget proposal passed on a tie broken by Vice President Gore.

In the House, the package passed by only six votes. No Republicans supported the president on the last vote, and none are expected to have a change of heart this time.

Sen. Herbert H. Kohl of Wisconsin, who supported the budget deal on the initial vote, announced he could not support a compromise that called for a gas tax increase higher than the 4.3 cents per gallon approved in the Senate.

One effect of lowering the proposed gasoline tax increase from 6 cents might be to reduce the amount of new social spending in the budget being sought by the House.

Members of the congressional Black Caucus were told by administration officials yesterday that the tentative plan called for splitting the difference between House and Senate versions on those programs.

For example, the earned income tax credit for the working poor -- passed by the Senate at $18 billion over five years and the House at $28 billion -- would be allotted about $21 billion.

Tax incentives

Funds for a new tax incentive program to encourage investments in blighted areas would be set at about $3.5 billion. The House approved $5.6 billion, but the Senate provided no funds for the program at all.

A proposed cut in funds for Medicare, the health care program for the elderly, would be set at $54 billion. The Senate proposed to cut the program by $58 billion over five years, the House agreed to cut only $50 billion.

Rep. Kweisi Mfume, the Baltimore Democrat who chairs the Black Caucus, said after a meeting with Mr. Panetta, "We're on the same page, but not yet on the same line."

But Mr. Mfume and Sen. Max Baucus of Montana, one of the leading Democrats on the joint House-Senate conference committee, said the size of the gasoline tax increase does not have to be the controlling factor on the size of what Mr. Clinton calls "social investments."

Mr. Mfume said he detected growing support among the rank and file Democrats for a higher increase in the corporate income tax rate. The White House and the budget conferees have settled on an increase to 35 percent from 34 percent.

But Mr. Mfume said a number of House freshmen, moderates and liberals favored returning to Mr. Clinton's original proposal of 36 percent. That would produce an additional $16 billion in tax revenue.

Sen. J. Robert Kerrey, a Nebraska Democrat who voted for the bill last time, proposed in a letter to Democratic and Republican leaders that a special session be convened after the budget bill is passed to tackle spending cuts through the appropriations process.

His suggestion was embraced by several other wavering lawmakers and got a warm reception from the White House.

"Polls show the public trusts the president a lot more than Congress," Mr. Kerrey said. "It's time for us to put up or shut up."

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