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Clinton gives up on a broad energy tax


WASHINGTON -- Giving up its effort to win a broad energy tax, the Clinton administration conceded yesterday that only a gasoline tax is likely to survive the House-Senate conference committee that is fashioning a final version of President Clinton's economic plan.

"I think the likelihood is we're looking more at a gas tax than a Btu tax or a utility tax of any kind," Mr. Clinton's budget director, Leon E. Panetta, said in the administration's first public concession of defeat.

Appearing on CBS News' "Face the Nation," Mr. Panetta said the administration also hopes to restore some of the Medicare spending that the Senate has voted to cut, as well as tax breaks to help small business.

To compensate for that additional spending, it appears that the gasoline tax increase would have to be higher than the 4.3-cents-a-gallon tax now in the Senate version of the economic package. Mr. Panetta declined to specify how much greater the figure is likely to be.

The energy tax is the knottiest of the hundreds of issues confronting House and Senate negotiators as they seek to produce an economic plan that can pass both chambers before Congress takes a monthlong break in early August.

Divisions over the issue are so sharp that some in Congress have suggested scrapping the energy tax altogether, even if it means falling far short of Mr. Clinton's goal of cutting the federal budget deficit by $500 billion over five years.

But yesterday, Mr. Panetta repeated Mr. Clinton's assertion that the administration will yield little ground on the $500 billion figure.

Rep. Kweisi Mfume, the Baltimore Democrat who is chairman of the Congressional Black Caucus, said on the same program that the administration should perhaps not insist on the $500 billion target, so it might be able to restore money for many social programs cut by the Senate.

"I don't know if any [energy tax] increase in acceptable," he said. "What would be acceptable is making sure that we take care of restoring the earned income tax credit fully, food stamps, child hunger programs, the family preservation program, the empowerment zones."

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