Democrats Seize Offensive On Deficit-Reduction Plan

Republicans slammed for trying to `protect the rich' from tax hikes

AS Democratic senators were voting at week's end on a deficit-reduction package that threatened to paint them as "tax and spend" liberals, party leaders finally found their voice in countering the Republican spin against the president's plan.

It was the Republicans themselves who gave the Democrats the hook on which to hang their message: the unveiling on Wednesday of their own budget proposal. The Republican plan contained no tax increases, just spending cuts - largely unspecified reductions in spending on government benefits.

The Republican plan was rejected by the Senate Wednesday in a procedural vote, 55-43. But they made their point.

Democrats, from President Clinton on down, wasted no time in slamming the Republicans. The president complained Wednesday that they aimed only to "protect the privileged and punish the middle class and the most vulnerable."

Speaking at a Monitor breakfast yesterday, House Speaker Thomas Foley (D) of Washington continued the theme: "I think if I have a fundamental belief as a Democrat vis-a-vis the Republicans, it's that they have an instinctive, visceral desire to protect higher-income Americans from [contributing] a fair share of public finance and support.

"And they're at it again," Mr. Foley said. "The only group in the country. Every other group is being asked to do something - farmers, workers, people who are Social Security recipients, people who receive government programs, students. Go down the list. The one group that the Republican Party doesn't want to have any participation in deficit reduction are people who earn over $200,000 a year."

Foley suggested that if Mr. Clinton had made a mistake in the selling of his package, it was in creating the impression that the middle class would bear much of the burden in new taxes.

That is not true, he added, citing a Congressional Budget Office analysis that 78 percent of the new tax burden would be placed on people who earn more than $200,000.

Democrats have been put in a tough spot over this deficit-reduction bill. They want to support the president and they want to cut the deficit, but they also want to be reelected.

Even though, as Foley says, Clinton's package would place most of the burden of new taxation on the wealthy, every American will feel at least some aspect of the bill - higher prices for energy, cuts in Medicare and Medicaid, higher taxes on Social Security for middle- and upper-income pensioners. And every Democratic senator who votes for the bill, especially the 20 who will be up for reelection next year, can envision the negative ad campaigns Republicans will cook up.

SO when a House-Senate conference begins next week to work out compromise legislation that resolves the differences between the House and Senate bills, political salability will be uppermost in members' minds.

Foley foresees some form of energy tax in the final bill. The House went along with Clinton's proposal for a "Btu tax" - a tax on various forms of energy based on their heat content - while the Senate, at press time, appeared set to go for a 4.3-cents-a-gallon gasoline tax.

Foley says other aspects of the House bill that have been modified by the Senate will be worked over in conference.

These include empowerment zones to boost business investment in poor areas and the increase in the earned-income tax credit.

The Speaker predicts that the conference will end sometime between July 12 and Aug. 6.

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