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House Leaders, Conservative Democrats Reach Agreement

By William J. Eaton
and David Lauter

Los Angeles Times

WASHINGTON

House leaders and conservative Democrats reached agreement early Thursday on a new procedure designed to curtail spending, raising hopes for passage of President Clinton's $496 billion deficit reduction package in a major congressional showdown only hours away.

An elated Speaker Thomas S. Foley, joined by Rep. Charles W. Stenholm, D-Texas, and Rep. Timothy J. Penny, D-Minn., announced the agreement after days of negotiations.

"This is a very positive development," Foley said.

The outcome was expected to help pass the troubled bill by picking up crucial votes of wavering Democrats when the massive bill to raise taxes and trim spending comes to a vote later Thursday.

Foley said the agreement "does build momentum" toward gathering the votes Democrats will need.

"This is a major, significant change regarding the budget process," Stenholm said.

Penny, another top conservative, said, "We'll do what we can to get the votes" to pass the deficit-reduction bill.

The agreement does not guarantee that spending will be restrained, but it does put pressure on the president and lawmakers to do so. Under the mechanism, spending targets would be set each year for Social Security, Medicare and the rest of the government's rapidly expanding benefit programs, which together account for half of the federal budget.

If the target is exceeded, the president would have to propose paying for the excess with tax increases, spending cuts or both -- or with borrowing, which drives up the deficit. Congress would then have to vote on his proposal, or one of its own, officials said.

Clinton worked the phones late into the day Wednesday to gain support for his budget plan.

White House officials conceded privately that failure to pass the budget bill in the House would deliver a devastating blow to an administration already staggering from a series of self-inflicted wounds.

"We realize the whole presidency is on the line now," said Rep. Charles B. Rangel, D-N.Y. "This presidency is going to be made or broken in the next couple of weeks, and I want to make certain it's not broken in the House of Representatives."

White House officials used less dramatic language in public but acknowledged privately that the vote is critical.

"We're finally starting to climb out of the toilet, and we've got our fingers up to the rim," one senior White House aide said.

Winning, on the other hand, could mark the beginning of another of Clinton's much-vaunted comebacks -- or so his aides hope.

The bill in question would enact Clinton's budget plan, which is aimed at reducing the size of the federal deficit by $496 billion over the next five years. It would raise taxes by a net $250 billion during that period -- one of the largest increases in U.S. history -- and reduce spending for mandatory benefits and other direct-spending programs by a net $87 billion.

Most of the political controversy over the bill has come from Clinton's proposed new energy tax, which would hit middle-class taxpayers. The tax would cost roughly $17 per month for an average family once it is fully in place, according to Treasury estimates.

Although some House Democrats have called for a delay in the vote, White House officials repeatedly ruled out any such talk, arguing that a delay would merely make Clinton look weaker and would not, in the end, rally any extra votes.

"We'd just get killed all weekend," one Clinton adviser said.

By the time he left his office for dinner Wednesday, Clinton had called some two dozen House members, aides said, adding that they expected him to call still more during the evening.

Clinton met Wednesday morning with members of the Congressional Black Caucus, some of whom have threatened to vote against the budget because it would cut benefit programs too deeply.

"Until it's done, there's a little bit of a problem everywhere," White House communications director George Stephanopoulos said. "It's all about balancing."

Administration vote counters said earlier Wednesday that of the 256 Democrats in the House, some 20 were certain to vote against the budget. Another 30 to 40 were considered wavering -- including many House freshmen, who have not yet had to cast such a difficult vote.

Because two House seats are vacant, a majority in the chamber is currently 217 votes.

In the search for votes, Clinton went so far as to call at least three moderate Republicans asking for support. The effort seemed in vain. Rep. Christopher Shays of Connecticut, one of the Republicans called by Clinton, predicted House Republicans would be unanimous in opposing the budget, and most Democratic vote counters agreed.

In addition to reducing spending for mandatory benefits, the budget bill would freeze spending on other programs, thereby forcing a $102 billion reduction in outlays for defense, foreign aid and domestic spending.

The remainder of the deficit reduction would be accomplished by lower interest rates leading to lower payments on the national debt.