Democrats Stress Unity As Budget Fight Nears

To show they can govern, fractious Democrats must shape a budget with no help at all from the Republicans

DEMOCRATIC congressional leaders and White House officials are striking a positive tone as they approach the start next week of negotiations over a budget bill.

They know the House-Senate conference won't be easy. No Republicans voted for the preliminary bills, and none are expected to sign on to the final compromise bill - a legislative rarity. That means the Democrats once again have to go it alone, with few votes to spare in the House and none to spare in the Senate.

The differences among Democrats are as sharp as any between Democrats and Republicans. For some, the top priority is to achieve as much deficit reduction as possible. Others care most about the ratio of spending cuts to tax increases. For others, such as the increasingly powerful Congressional Black Caucus, antipoverty initiatives are presented as "nonnegotiable."

"These things all compete with each other, so it's intensely complicated," says a senior White House official. "But I don't think that changes the outcome."

A compromise will be reached and a bill will pass, say representatives of various factions, because it has to. The future of the Democratic Party, which has its first chance in 12 years to show it can govern, depends on it.

Among the various barons of the budget process the watchword is cooperation. Last week the top congressional players and the relevant Cabinet and White House officials met to talk strategy, and they came away talking positively.

Rep. Dan Rostenkowski (D) of Illinois and Sen. Daniel Patrick Moynihan (D) of New York - respective chairmen of each house's tax-writing committee, where the toughest differences need to be ironed out - will not be competing, says a committee aide. "Their strategy is for full cooperation," he says. "The aim is clear: Find something that will pass. In the Senate, the math is startlingly simple. You can't lose one vote."

The White House's strategy, says the senior official, is to stick to the president's broad principles and ask the conferees to find "some kind of compromise that adheres to those principles." The principles include: a one-to-one ratio of spending cuts to tax increases, $500 billion in deficit reduction over the next five years, and an energy tax.

The White House will be more engaged in the search for that compromise than it was in the crafting of the Senate bill, "but we also don't want to be so engaged as to get in their way," says the official. "You talk to people. You ask them what's on their minds."

The official stresses that the bills are, in many ways, remarkably similar to each other and to what the president originally proposed in February. But the differences present a chasm that some conferees can't, at this point, see a way to bridge.

The House bill provides for a broad-based Btu tax that would tax various forms of energy based on their heat content, with a projected revenue of $72 billion over five years. The Senate passed a 4.3-cent-a-gallon transportation fuels tax, which would raise only $22 billion. To make up for the lost revenue, the Senate cut projected increases in Medicare spending by $10 billion and cut or dropped the president's anti-poverty proposals.

The House bill would fail miserably in the Senate, and vice versa. And no early outlines of a compromise have yet to emerge. Veterans of House-Senate negotiations say they have never faced a tougher conference.

"I just don't see how to do it," says Rep. Charles Rangel (D) of New York, a senior member of the House Ways and Means Committee and a force in the Black Caucus. But, in an interview, Mr. Rangel artfully goes around the caucus's stand of "nonnegotiability" on its demands for spending to help the poor. The House bill, he says, is the "minimum." It allots more money for tax breaks for the poor than the Senate bill and includes urban enterprise zones the Senate eliminated. But the Black Caucus is "not think ing in terms of holding the conference hostage" to its demands, he says.

The biggest sticking point is the energy tax. The White House, in artful language of its own, has resurrected its public support for "the energy tax" - without specifying if it means the Btu tax or a transportation fuels tax or some of each or even none of the above.

"We need revenue from energy taxation," but the White House isn't going to concern itself with sorting out the differences between the two houses, says the White House official.

"What we are concerned about is not letting energy taxation control this debate," the official continues, "because what we are trying to do here is change the economic future and undo 12 years of Reagan-Bush economics. Our strategy is to get people to understand that this is positive.... This is investment; this is job growth.... That's why getting things like empowerment zones back in there [is important]."

Rep. Mike Synar (D) of Oklahoma insists that the Btu tax is "not dead at all," a striking position for a congressman from an oil state.

Speaking from his district headquarters in Muskogee, Okla., Mr. Synar says he's not heard one word about the Btu tax from his constituents during the recess. It's health care that's on people's minds, he says.

"The Senate is going to learn it (the Btu tax) is as broad-based a source of revenue as you can find," he says.

A gasoline tax big enough to raise $72 billion over five years would mean an increase of about 23 cents a gallon, he says, and that's unacceptable.

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