How The Clinton Budget Has Changed

August 04, 1993|By JEFF LEEDS OF THE WASHINGTON BUREAU, STAFF GRAPHIC

In the six months since President Clinton unveiled his economic program, it has gone through substantial change, first in the House and then in the Senate. This week congressional negotiators agreed on a final version of the bill, which the House will vote on Thursday and the Senate will vote on Friday. Here is a look at how the plan has been transformed.

OVERVIEW

WHAT HE PROPOSED: Proposed a five year package that would reduce the deficit by a total of $406 billion over five years: $267 billion in taxes and $139 billion in spending cuts.

WHAT HE GOT: -- The bill aims to cut the deficit by about $496 billion over the next five years by raising about $241 billion in taxes and restraining the growth of spending by about $255 billion.

TAXES

Corporate Taxes: WHAT HE PROPOSED: A jump in the corporate income tax rate from 34 percent to 36 percent.

WHAT HE GOT:-- A jump in the corporate income tax rate from 34 to 35 percent.

Investment Tax Credit -- Eliminated, but small businesses will be allowed to write off $17,500 for equipment purchases made after Jan. 1, 1993.

Energy Tax

WHAT HE PROPOSED: A broad-based energy tax on the heat content of fuel as measured by British thermal units, which would have been collected from utilities and energy producers.

WHAT HE GOT: -- The $72.3 billion Btu died in the Senate and was replaced by a 4.3 cents-per-gallon tax on gas and other fuels, which is expected to raise only $23 billion over five years.

High Income Taxpayers

WHAT HE PROPOSED: An increase from 31 percent to 36 percent for couples with taxable incomes over $140,000 and singles earning more than $115,000. A 39.6 percent rate for both individuals and couples earning more than $250,000.

WHAT HE GOT: -- No change.

Hospital Insurance Tax

WHAT HE PROPOSED: Elimination of the current $130,000 cap on the Medicare tax, making all income taxable.

WHAT HE GOT: -- No Change.

Social Security Recipients

WHAT HE PROPOSED: An increase from 50 percent to 85 percent of benefits that would be subject to taxes for couples earning more than $32,000 and singles who make more than $25,000

WHAT HE GOT: Eighty-five percent of benefits taxable for couples with incomes of more than $44,000 and singles making more than $34,000.

Business Meals

WHAT HE PROPOSED: Slash deduction for business entertainment from 85 percent to 50 percent of the bill.

WHAT HE GOT: -- No change.

Earned Income Tax Credit

WHAT HE PROPOSED: $28.6 billin in tax breaks for the working poor over five years.

WHAT HE GOT: -- $21 billion and would allow people without children to qualify for the benefit in later years.

Empowerment Zones

WHAT HE PROPOSED: Tax breaks of $4.1 billion for 50 empowerment zones to encourage businesses to locate in econnomically depressed urban and rural ares.

WHAT HE GOT: -- $3.5 billion for empowerment zones.

Luxury Tax

WHAT HE PROPOSED: NO change in luxary tax

WHAT HE GOT: Elimination of 10 percent surcharge on yachts, jewelry, furs and planes.

CUTS

Medicare

WHAT HE PROPOSED: $48.4 billion ove five years from heallth care coverage for the elderly

WHAT HE GOT: -- $56 billion over five years.

Medicaid

WHAT HE PROPOSED: $7.8 billion from medical treatment of the poor

WHAT HE GOT: -- $7 billion over five years.

Federal Pay

WHAT HE PROPOSED: 58.9 billion in pay raises and retirement benefits.

WHAT HE GOT: -- Eliminated from the bill because of a procedural problem.

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