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Budget package causing queasiness in Congress'Democrats Deficit reduction frightens many


WASHINGTON -- More than 150 members of Congress will gather in an ornate room on Capitol Hill this morning to begin cutting a deal Democratic leaders warn is vital to their party, their president and the nation.

Despite the loftiness of the claim, for much of the next three weeks the lawmakers' efforts to craft a compromise on President Clinton's budget package are expected to unfold with all the grace and statesmanship of mud wrestling.

Already, the politically spooked Congress appears inclined to reconcile its aversion to tax increases and its desire for more spending by cheating on Mr. Clinton's $500 billion deficit reduction target.

"The big loser will probably be deficit reduction," Rep. Benjamin L. Cardin of Baltimore predicted two weeks ago. By yesterday, the idea seemed to have picked up such steam that House Speaker Thomas S. Foley would say only that he expected the bill to reach the $500 billion "neighborhood."

Even before the conferees met, the House began chipping away yesterday at its own deficit reduction work. House Democrats voted to accept the Senate's version of new taxes on Social Security recipients, which would affect only individuals earning $32,000 a year and couples with income of $40,000 annually, rather than the $25,000 and $32,000 thresholds in the Clinton package that the House passed in May.

Making up the losses

They approved no plan to make up the $5.7 billion in lost revenues, but that could come later.

Very few of the budget conferees meeting this morning in a House-Senate committee will be actively involved in the negotiations.

The 50 or so Republicans will have no role at all, because the GOP has unanimously refused to support any version of the Clinton plan.

Hard bargaining on the issue of taxes will be confined to a small group of Democrats, including House Ways and Means Committee Chairman Dan Rostenkowski of Illinois, Senate Finance Committee Chairman Daniel P. Moynihan of New York and Senate Majority Leader George J. Mitchell of Maine. This group is expected to confer formally or informally with Mr. Clinton, who is scheduled to mark the opening of the talks with a visit to the Capitol this afternoon.

Talks during talks

Because Democrats can afford to lose very few votes in either chamber, party leaders will take the unusual step of sounding out party factions while the conference is in progress. Senate Democrats will hold special meetings on the tax bill every Thursday for the next few weeks.

In the House, conferees may even take straw votes of such groups as the Congressional Black Caucus or Southern and Western conservatives.

In fact, nearly every Democrat on Capitol Hill is already caught up in the chaotic process of threats, feelers, ultimatums, trial balloons and peace overtures that will prevail until a consensus is reached.

Facing the biggest test yet of their ability to govern, Democratic leaders won't even entertain the prospect of failing to pass a budget package.

"I think the future of the Democrats and the future of the Congress as an institution" depends on getting the deficit reduction bill passed, said Rep. Bill Richardson of New Mexico, chief deputy whip for the Democrats.

'Closed' presidency?

Mr. Moynihan predicted last weekend that if the effort fails, the Clinton presidency would "close down."

Some of this talk appears to be strategic hyperbole.

But getting a deal, probably involving some combination of higher gasoline and utility tax increases than the Senate version but less new spending for health and social programs than the House approved, is expected to require every bit of razzle-dazzle Mr. Clinton and his team can muster.

"It will pass, but it will be a huge battle," predicted Mr. Richardson, who said the 38 Democrats who voted against the narrowly passed House bill have now been joined by another dozen considered to be "problem" votes.

After Congress' July 4 break, there is also a new queasiness in the Senate, where Vice President Al Gore had to break a tie vote to get the measure through.

"I'm getting the feeling really that people are very aware of the taxes and very aware of the spending cuts, [but] they're not very aware of the deficit reduction we have here," reported Sen. John B. Breaux, a Louisiana Democrat, who suggested Tuesday that perhaps the deficit reduction target should be dropped as low as $400 billion.

"It's all estimates, anyway," argued Rep. David R. Obey, a Wisconsin Democrat. He noted that lowering the target to $470 billion could allow elimination of all new energy taxes, and there would even be some money left over for social programs.

Emergency aid for the Mississippi River flood will cost more than dropping the energy tax, Mr. Obey said.

Scaring markets

That sort of talk could well be poison for the financial markets, which have become all too accustomed to watching Congress run away from tough choices. The Clinton White House is also alarmed about the political symbolism of shrinking the deficit reduction goal.

"One of the few things that has been constant throughout this process is the $500 billion figure," observed Stanley Collender, director of federal budget policy for Price Waterhouse. "Even if they dropped just to $480 billion, it would look like a retreat."

The White House will operate its selling job from a "boiler room" run by Deputy Treasury Secretary Roger Altman, a college roommate and close confidant of Mr. Clinton; his group will mobilize support from Democratic politicians and sympathetic interest groups.

After the committee completes its work on the deficit reduction bill, but before the bill goes back to the House and Senate for a final vote, the president himself is expected to make a nationally televised address.

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