Tentative pact reached on budget Battle over Medicare cuts remains

Black Caucus hasn't approved deal

July 31, 1993|By Karen Hosler | Karen Hosler,Washington Bureau Staff writer Carl Cannon contributed to this article.

WASHINGTON -- President Clinton agreed last night to a tentative budget deal that would give him a crucial political victory but at the cost of a smaller deficit reduction and less spending for social programs than he had sought.

A final bargain could not be reached last night because of several remaining disputes, primarily a battle revolving around a $2 billion additional cut in financing for Medicare, the health care program for the elderly.

"There is no deal," said Rep. Kweisi Mfume, a Baltimore Democrat and chairman of the Congressional Black Caucus.

Mr. Mfume said that he was concerned about several issues, including the Medicare cuts, and that he would be making his case to congressional and administration negotiators over the weekend.

Nevertheless, the White House was declaring the agreement still being crafted by congressional negotiators a triumph. Press secretary Dee Dee Meyers predicted that the deal would reduce the deficit by $490 billion over five years -- 98 percent of the president's $500 billion goal.

"Any time you get 98 percent on a test, it's an A-plus," she said. "Webroke gridlock on this thing."

House and Senate leaders, relatively upbeat after a long day of bargaining, said they had resolved all but a few minor issues and had directed their aides to spend the weekend developing the precise numbers to reflect their decisions.

Their compromise agreement would cut Mr. Clinton's investments in social programs and economic incentives by at least half and replace his broad-based energy tax with a gasoline tax increase of 4.3 cents per gallon, which would raise only a third as much revenue.

The core of the package, aimed at reversing Republican-era tax policies that favored the rich, remains a hefty boost in income taxes for corporations and wealthier Americans. And Social Security recipients who make more than $32,000 a year if they are single or $40,000 a year as a married couple will also have to pay taxes on a larger share of their benefits.

But lawmakers have shifted the balance of tax increases and spending cuts so that they are now about equal, compared to the 3-1 ratio Mr. Clinton proposed.

"I think that reflects the country," said Sen. Max Baucus, a Montana Democrat who played a key role in the budget negotiations. "I think the country wants more spending cuts."

Despite all the attempts to satisfy lawmakers, the compromise budget plan does not have the votes yet to guarantee that it will pass.

But Mr. Clinton, Vice President Al Gore and other administration officials as well as congressional leaders will be working intensely to nail those votes down over the next few days.

The president is already hard at the lobbying task. He went jogging yesterday morning with Mr. Baucus, seeking tips on how he should approach the senator's colleagues. On Thursday night, Mr. Clinton dined with two wavering Senate Democrats -- Herbert Kohl of Wisconsin and Joseph I. Lieberman of Connecticut.

The package is scheduled to be brought up first in the House next Thursday, with Senate consideration to follow a day or so later.

A last-minute hang-up facing the lawmakers was how to reach Mr. Clinton's $500 billion, five-year target for deficit reduction, but the White House has been less concerned about that goal than some in Congress.

The White House adopted yesterday its usual practice during these budget negotiations of insisting that the agreement being produced by Congress was just what Mr. Clinton had wanted all along.

For example, in his latest list of immutable "principles" that had to be retained in the deal, the president stressed that the lower gas tax would protect the middle class. Missing from that list, enumerated yesterday in an interview with Arizona reporters, was Mr. Clinton's previous demand for a broad-based energy tax.

"The president stood his ground," Ms. Myers said. "We feel very good about this package."

Among the negotiators' chief concerns last night was meeting the minimum demands of the Congressional Black Caucus and other urban liberals who were determined to salvage new social spending from the first budget by a Democratic president in 12 years.

Those demands include $21 billion for a tax credit for the working poor that would provide phased-in benefits for single, childless adults as well as families, about $4 billion for a program of tax incentives to encourage investment in blighted areas, and limiting cuts in the growth of the Medicare program to about $54 billion, down from $58 billion passed by the Senate.

But the tax negotiators decided to increase the Medicare cuts to $56 billion in order to make up some of the revenue they lost because the Senate wouldn't accept a higher gasoline tax increase of 6.5 cents per gallon, which had been urged by the House.

The Medicare cut was perhaps the largest of the 11th-hour reductions that negotiators made, according to one congressional source.

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