Democratic Leaders Work to Break Budget Deadlock

WASHINGTON —  Democratic congressional leaders groped toward a compromise Friday on a critical budget bill that would break a weeks-long deadlock and clear a path for adjournment next week of the first session of the 101st Congress.

Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) and House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) met privately throughout the day in an effort to bridge differences over a roughly $6-billion revenue package and cuts in the Medicare program. Separate negotiations were also taking place to break a House-Senate deadlock over the controversial “catastrophic” health insurance plan that the House wants repealed and the Senate wants scaled back.

An agreement between the two committees on tax changes would complete work on a roughly $14-billion deficit-reduction bill that must be passed if Congress is to meet its budget goals for the year. The package, which will include dozens of spending cuts, will also include savings achieved by automatic budget cuts triggered Oct. 16 when Congress and the White House failed to meet the fiscal 1990 deficit target of $110 billion.

Those across-the-board cuts, known as a sequester, save more than $1 billion a month. And the final fiscal package is likely to include as much as three months’ worth of the automatic savings. Passage of the deficit-reduction bill would lift the automatic cuts for the remainder of the fiscal year that ends Sept. 30.

House and Senate leaders were hoping for an agreement by late Friday night to permit floor debate on the budget package beginning Sunday.

House Speaker Thomas S. Foley (D-Wash.) predicted Friday that the budget cutting bill will be satisfactory to President Bush, who this month challenged Congress to pass a measure that would be stripped of extraneous items and fiscal gimmicks and that would cut the federal deficit by at least $14 billion. Bush said at the time he would veto unacceptable legislation and permit the roughly $16 billion in automatic spending cuts mandated by the Gramm-Rudman-Hollings budget law to remain in effect for the full fiscal year.

“Relatively speaking, it will be a clean bill,” Foley said. “I don’t think, as I said before, there would be any reason for the President, on budget grounds, not to accept it.”

But Senate Republicans, who had not seen all the details of the emerging budget bill being negotiated by Democrats, said it appears from its outlines that it would not meet the $14 billion in savings demanded by Bush.

“They fall substantially short,” said Sen. Pete V. Domenici of New Mexico, ranking Republican on the Senate Budget Committee.

Congressional leaders are banking on White House acceptance of some budgetary sleight-of-hand that the Administration agreed to in April’s budget summit with Capitol Hill. These include savings of $1.7 billion achieved by not calculating Postal Service losses in the federal deficit.

House Budget Committee Chairman Leon E. Panetta (D-Calif.) predicted that the budget bill could be ready for consideration by the full House Sunday. Referring to the decision to have Rostenkowski and Bentsen thrash out the differences without other conference committee members present, Panetta said: “At least we’ve got the two bulls in the corral.”

The House passed its $11-billion version of the budget measure, known as a reconciliation bill, in early October, adding to it dozens of unrelated provisions that are being dropped in conference with the Senate. The Senate’s $14-billion version of the bill was passed Oct. 13.

The tax-writing committees must come up with at least $5.3 billion in new revenues, plus a bit less than $2 billion in spending cuts, primarily in Medicare. The overall budget package is likely to include changes in law that would cut the deficit about $11.5 billion, plus the additional savings of $3 billion to $4 billion from the across-the-board cuts under Gramm-Rudman-Hollings.

The package is likely to include extensions of several popular but money-losing tax breaks that are due to expire, including research and development and subsidized housing credits.