Budget Plan Faces Hard Sell On Capitol Hill

Lobbyists marshal forces over $60 billion in Medicare cuts; some in GOP balk at tax hikes

THE nation's top political leaders took five months of intense bargaining to craft significant budget cuts. That was the easy part.

The battle that the negotiators have said all along will be the hard part has begun - selling the deal to a majority in Congress.

Congress will consider the five-year, $500 billion deficit cuts in what appears to be an atmosphere of explosive voter rebellion against their elected representatives.

If the deal survives with its cutbacks and tax hikes largely intact, the larger question is whether it will help repair this battered confidence in government.

``At a time when people are frustrated with logjam and stalemate, I don't think this will make much of a difference,'' says William Galston, a centrist Democratic thinker and University of Maryland professor.

Leaders of both parties were eager to stress, however, that the deficit cuts this time were not the accounting tricks that have skirted deficit targets in the past.

``This is real,'' announced President Bush on Sunday. ``It is not a phony smoke-and-mirrors deficit reduction.''

One indication of how ``real'' the plan is could come soon from Alan Greenspan, chairman of the Federal Reserve Board. He has indicated that he will reduce interest rates if the White House and Congress agree on a deficit-cutting package.

The deal that kept negotiators up all night Saturday brought no triumphant cries of victory in the White House Rose Garden Sunday. It was the sober success of shared sacrifices and small, carefully weighted defeats.

Even as the outline of the plan was announced midday Sunday, advocates for the elderly were preparing their counterattack Monday morning. The biggest spending cuts in the budget deal - $60 billion over five years - are out of the Medicare program.

This is an area that has stung politicians badly before. Intensive lobbying by advocates for seniors overturned a Medicare program for catastrophic health care last year because it raised premiums on relatively affluent, and outraged, seniors.

The newly proposed Medicare changes may provoke an even sharper response.

``Here you're having people pay an amount that exceeds the catastrophic-care costs, but without any benefits,'' says Ron Pollack, executive director of Families USA, an advocacy group for seniors and their families.

The proposed deal would raise the deductible levels that individuals would pay before the Medicare insurance would take over, and it would raise the premiums that are deducted from Social Security checks.

Negotiators rejected any cuts or slowdowns in cost-of-living increases for Social Security recipients. The political flak for such a move would be too heavy.

Yet by 1995, the rising Medicare premiums will equal a 75 percent cut in the cost-of-living adjustment, Mr. Pollack says.

``I think people are going to take it out on election day,'' he warns, hoping the politicians take the Medicare changes out before enacting the budget.

``Medicare could become the proverbial third rail of this thing,'' says Mr. Galston, referring to the untouchable, electrified rail on a subway track.

If Medicare pruning is considered a Democratic sacrifice, the Bush administration paid its political dues on taxes.

The White House dropped the capital-gains tax cut and agreed to raise taxes on gasoline, alcohol, cigarettes, and luxury goods. With some tax incentives to business thrown in - credits for research and development, purchasing scientific equipment, as well as for oil and gas exploration - negotiators hope to win support of conservative House Republicans.

The Pentagon also faces up to $182 billion in cuts over the next five years.

The discipline in this budget comes from what White House budget director Richard Darman calls ``mini-sequesters.'' Just as an automatic, across-the-board, $105 billion budget cut still hovers over the federal government, so the deal would threaten each federal account and each spending appropriation with automatic cuts if it grew past the agreed limits.

The $40 billion deficit deal for the fiscal 1991 budget is less than 40 percent of the reduction needed to meet this year's Gramm-Rudman deficit target.

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