Senate passes budget plan by one vote Gore breaks tie after Kerrey gives support to bill


WASHINGTON -- With a final dramatic assist from a former rival, President Clinton won enactment last night of the first crucial element of his campaign to revive the economy, reduce the deficit and redirect U.S. resources.

Sen. Bob Kerrey of Nebraska, who was defeated by Mr. Clinton for the Democratic presidential nomination last year, kept the White House in suspense all day before announcing he would cast the decisive vote that sent the $496 billion deficit reduction package to Mr. Clinton's desk for signature on a 50-50 tie vote broken by Vice President Al Gore.

Mr. Gore's vote, cast in a somber tone that contrasted completely with the euphoria that spread through the administration and Democratic ranks in Congress, was greeted with hoots and cheers from staff members at the White House.

The five-year package of $241 billion in net tax increases and $255 billion in net spending cuts passed the House by just two votes late Thursday night.

"This was not easy, but real change is never easy," President Clinton told a crowd of wildly cheering aides at a celebration in front of the White House last night. "It is always easy to sustain the status quo and talk as if you are for change. This is a sharp departure from business as usual that creates jobs, reduces the deficit and puts the American people first."

But Mr. Kerrey said his heart "ached" because he was about to vote for a program that asks "too little" of middle Americans in its quest to wean the country off its spending binge.

"I could not and should not cast a vote that brings down your presidency," Mr. Kerrey said in an anguished floor speech to packed galleries shortly before the roll was called.

Even so, Mr. Kerrey said the president should have stuck with his broad-based energy tax, despite opposition in the Senate. It was replaced with a far smaller 4.3-cent gasoline tax -- the only element of the bill that broadly affects the middle class.

"If they notice, I will be surprised," Mr. Kerrey said, "and if they complain, I will be ashamed."

Scolding the Republicans and his Democratic colleagues as well as Mr. Clinton, the Nebraska Democrat charged that no one wanted to admit that the deficit was largely the result of the "rapid, unencumbered growth of programs that primarily benefit the middle class."

Senate Minority Leader Bob Dole of Kansas took some relish in quoting Mr. Kerrey's objections to the budget bill in his final floor speech on the measure and spoke directly to the television audience he assumed was watching the debate from home.

'Grab your wallet'

"Put down your remote control and grab your wallet," he warned, "because your taxes are going up. In fact, they went up seven months ago, but you didn't know about it," he added, referring to income taxes on the rich that will take effect retroactively to last Jan. 1.

"I guess the Democrats are going to go out and celebrate: We nailed the rich, we nailed the successful, and we nailed the people who are creating the jobs," the Republican leader said.

Senate Majority Leader George J. Mitchell of Maine said the GOP talk was cheap.

Arguing that those who "talk the loudest about spending cuts for deficit reduction are the least willing to support them," Mr. Mitchell said, "It's easy to talk and tough to act."

As was fitting for the end of a six-month, highly contentious, fiercely partisan struggle over fiscal priorities, the Senate outcome remained a cliffhanger almost until the end.

With all 44 Republicans opposed to the bill, the Democrats needed tomuster a majority of at least 50 from within their ranks.

Yesterday's drama revolved largely around Mr. Kerrey, who played Hamlet much of the day in agonizing over his vote before finally informing the White House about an hour before the tally that he would ensure the victory.

After his speech, Mr. Kerrey was thanked on the floor by Sen. Daniel Patrick Moynihan of New York, the Finance Committee chairman, who has been absorbed in the success of this bill. Many of his other colleagues also came forward to shake his hand and express agreement with his remarks.

Maryland Sens. Barbara A. Mikulski and Paul S. Sarbanes were among the loyal Democrats whose support for the Clinton economic program was never in question.

Mr. Kerrey, who voted in favor of the budget bill when an earlier version was approved by the Senate in June, was the only senator of the 100 whose position was still in doubt as the debate over the final version of the budget entered its final hours.

The Nebraska senator told reporters he felt it would be particularly awkward for him as a presidential rival of Mr. Clinton's if he were the one who destroyed the political momentum for the Clinton program.

Mr. Clinton's victory put in place the foundation of that program: a much compromised program of tax increases, spending cuts and investment incentives that will begin to reverse 12 years of "trickle-down" economics fostered by Republicans.

Tax increase on wealthy

Corporations and wealthy individuals will bear the brunt of the income tax increases. But the middle class will be nicked by a rise in the gasoline tax of 4.3 cents per gallon.

Spending cuts over five years will pare deeply from the Pentagon, Medicare for the elderly, Medicaid for the poor and a freeze in the growth of most social programs.

Despite an effort to tighten spending, not all the new revenue raised by $275 billion in total tax increases will be used to cut the deficit. About $34 billion will be used to expand tax credits for the working poor, create empowerment zones to encourage businesses to locate in blighted areas and give new tax breaks to businesses to create jobs.

The plan is aimed at cutting the government's annual shortfall to $213 billion in 1998. Without it, the deficit is projected to be $361 billion in 1998.


The deficit-cutting package just passed will move down Pennsylvania Avenue from the Capitol to the White House in the next several days, with a presidential signing ceremony expected early next week.

But approval of the conference report, which is akin to a blueprint for the budget, doesn't mark the end of the long and laborious process.

President Clinton has agreed to seek more spending reductions, and the administration will likely send legislation to Congress next month that will lock in the already agreed-to cuts and make provisions for further trims.

Approving specific cuts is something most legislators have a very hard time doing, however, and many observers expect that battle to be a lengthy one.

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