New plan's approval seen Senate gets House budget

THE BALTIMORE EVENING SUN

WASHINGTON -- Congress lurched toward enactment of a budget plan today that could persuade President Bush to sign funding legislation ending a three-day shutdown of government services.

The Senate was expected to approve the House-passed plan for fiscal 1991, raising hopes that government services would be restored tomorrow.

Today is Columbus Day, a federal holiday, mitigating the impact of the governmental shutdown that began Saturday when Bush vetoed a stopgap funding bill after congressional defeat of a deficit-cutting budget plan he advocated.

It was not immediately clear whether Bush supports the new five-year, $500 billion deficit-reduction plan, which is modeled on the previous one but would result in smaller increases in Medicare charges and no tax on home heating oil, House members say.

If Congress and the president don't agree on a plan today, all non-essential services would remain frozen and most federal workers would be sent home.

Tourists have borne the brunt of the shutdown because the National Park Service closed museums, parks and landmarks like the Washington Monument.

Many frustrated tourists, unable even to tour the White House, marched to the Capitol to watch congressional proceedings and in some cases express their unhappiness to individual lawmakers.

"They're angry and they're disgusted, they're frustrated, and they think all of us ought to get the job done and stop carping and start cooperating," said Maryland Rep. Steny H. Hoyer, D-5th.

A weary House divided roughly along party lines and led by Democrats passed the budget plan about 2:30 a.m. today on a vote of 250 to 164. About two hours later the House passed stopgap funding legislation, 305 to 105, which Bush must sign if government services are to be maintained until a final budget is adopted later this month.

All Maryland congressional members voted for the temporary funding legislation. Two Maryland members voted against the budget plan, Reps. Roy P. Dyson, D-1st, and Helen D. Bentley, R-2nd, both of whom voted to defeat the previous plan.

Reps. Benjamin L. Cardin, D-3rd, Beverly Byron, D-6th, Tom McMillen, D-4th, and Hoyer voted for the plan, as did Rep. Kweisi Mfume, D-7th, who voted against the previous version.

House Republicans, split over the budget issue, didn't participate in negotiations over the plan and most voted against it. Thirty-two Republicans and 218 Democrats voted for the plan; 28 Democrats and 136 Republicans voted against it.

The debate included an angry exchange between House Speaker Thomas S. Foley, D-Wash., and Rep. Newt Gingrich, R-Ga., and a crowd-pleasing poem by Rep. Silvio O. Conte, R-Mass., that included these lines:

"We can't make cuts that cause some sting/We can't even do a thing.

"And now we have run out of time/And that, dear friends, is our own crime."

Gingrich, who led the revolt against the Bush-backed budget last week, lectured Foley about how the Democrats now needed to give Bush a spending bill he could accept.

"Of all the people in this House, of all the people in this country that has little claim to cooperating with his president it is the gentleman from Georgia," Foley responded, bringing loud cheers from fellow Democrats.

Bentley said she voted against the plan because, "People don't want new taxes." She complained that the plan would allow Democrat-controlled committees to approve at least $140 billion in new taxes over five years.

But Mfume said the new plan was much better than the previous one, which congressional leaders of both parties worked out with the Bush administration and then tried to sell to members.

Mfume said the new plan preserves congressional authority in the budget process, reduces the impact on senior citizens who pay for Medicare health insurance and assures more progressive taxation.

The new plan, like the earlier one, would reduce the deficit by $40 billion in fiscal 1991, which began Oct. 1, and $500 billion over five years, through spending cuts and revenue increases. But while the first plan outlined $60 billion in Medicare cuts and specified increases in excise taxes, the new plan would cut $42 billion from Medicare and leave tax decisions to congressional committees.

Cardin, a member of the tax-writing Ways and Means Committee, said senior citizen groups approve of the new plan because it will require beneficiaries to contribute 25 percent of the program's costs, instead of 30 percent as the first plan required.

Monthly premiums nonetheless would increase, keeping pace with the program's rising costs. Deductibles also would rise under the new plan, from $75 a year to $100, $50 less than in the first plan.

Cardin predicted that the committee would approve increases in alcohol, cigarette and gasoline taxes, and a tax on luxury items like expensive cars and boats. But he said the increase in gasoline taxes probably would be less than the 12-cent-a gallon increase specified in the first plan.

The committee would not approve the two-cents-a-gallon tax on home heating oil contained in the first plan, he said.

Cardin and other lawmakers said Democrats are likely to press for an increase in the tax rate from 28 percent to 33 percent for people with incomes more than $150,000 a year.

Investment tax credits in the first plan, termed loopholes for the wealthy by critics, would not be approved by the committee, Cardin said.

"I'm very pleased about this," he said of the new plan.

Many Republicans also said they would accept higher taxes for the wealthy, particularly if capital gains taxes are reduced. But they criticized the bare-bones budget plan for leaving decisions to the committees and for raising the possibility that the tax increase would be $10 billion more than the $135 billion called for by the first plan.

Some Democrats acknowledged that by giving committees authority over cuts and tax increases it will be more difficult to reduce the deficit significantly. Hoyer, the fourth-ranking House Democrat, added, "It'll be more difficult without the cooperation of the Republicans . . ."

The plan was developed by House and Senate Democrats in meetings with one Republican Senator, Pete V. Domenici of New Mexico. Domenici refused to endorse the budget plan, saying he hadn't had an opportunity to consult with other Republicans.

Despite some concern over Congress' ability to achieve real reductions in the deficit, McMillen said, "I think everybody is going to be watching that closely."

Changes under the new plan

* Medicare: The first budget bill called for $60 billion in Medicare fee increases and cuts in payments to hospitals and providers. The new plan would cut that by a third -- half of which might be made up with new taxes. That could bring the total of new taxes to $145 billion over the next five years. Increases in the deductible for doctors' bills would rise from $75 to $100, instead of $150 in the original plan. In addition, monthly premiums would rise at a much slower rate.

* Taxes: The original plan outlined a specific tax program including new levies on gasoline, fuel oil, cigarettes, alcohol and other items. The new version leaves the specifics for later and opens the door to other possibilities -- including President Bush's demand for a cut in the capital gains tax and Democratic insistence on a increase in taxes on the rich.

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