Budget realities tax Newt's Republicans

The first 100 days of the brave new Republican era on Capitol Hill are almost halfway through. But after an easy opening when it seemed as if the world could be redrawn with the proper use of an electronic voting button, House Speaker Newt Gingrich and his men are running into trouble. The reasons are as old as Congress: money and taxes.

In truth, the "Contract with America" was always slightly less than met the eye. In the House, the well-drilled Republican cohorts could win and - with the exception of Wednesday's failure to stop a Democratic amendment preventing faster deployment of a Star Wars anti-missile programme - thus far have won a majority for everything they choose.

Last night, the juggernaut rolled on, defying President Bill Clinton's veto threats and approving by a 241-181 majority, the Contract's National Security Revitalization Act, slashing contributions to the cost of UN peace-keeping efforts and prohibiting American troops from serving under foreign command.

But the net results of six weeks' frenetic activity are modest. Reforms to Congress have been enacted, and a ban on "unfunded mandates", preventing Congress imposing laws on the states without providing the money to pay for them, is almost ready for Mr Clinton's signature. The rest is anyone's guess.

For all Mr Gingrich's celebrity, the House is only part of the legislative battle. To become law, the Contract's provisions must also pass the Senate and then survive any presidential veto, which both chambers must muster a two-thirds super-majority to override. The problem right now is the Senate.

At the best of times, the upper chamber hates being rushed. It is fiercely jealous of its prerogatives and its arcane rules permit a single member, if he is determined enough, to tie up business for weeks. To break a filibuster, 60 votes are required; the Republicans have but 43. The balanced budget amendment is a perfect illustration of what can happen.

The measure, requiring a balanced federal budget by 2002, swept through the House. The betting is narrowly that the Senate too will come up with the two-thirds majority needed for an amendment to the Constitution - but when? For three weeks, the proposal has been picked over by hostile Democrats. Meanwhile, all else waits.

No less important, the middle class tax cuts pursued with such religious zeal by Mr Gingrich and his followers, may no longer be such a sure thing. Republicans, Democrats, and Mr Clinton himself all support them. But Republican focus groups suggest that the public sets far greater store by deficit reduction. Several key Senators, moreover, insist spending cuts must be made before any sort of tax relief.

All is part of a dawning realisation among Republicans that you can pursue tax cuts or a balanced budget, but not both simultaneously. Hence potential problems for other parts of the Contract, notably the proposed cut in capital gains tax, and social security breaks for the elderly - and the refusal of 24 Republicans to stand by Star Wars.

The mini-revolt does not mean the Republicans are going soft on defence. Rather, the rebels were fiscal hardliners, arguing that no more money should be given to a low priority of the Pentagon budget when Congress was trying to reduce government spending. By the same token, some version of welfare reform and handing more responsibility to the states, almost certainly will be passed and signed by the President.

But Mr Clinton promises to veto the National Security Revitalization Act in its present shape. The veto pen also awaits any crime bill which repeals the ban on assault weapons and drops plans for extra police on the streets. Votes for an override are not there. And even as he continues to bark out instant opinions on everything under the sun, the House Speaker himself accepts reality.

No longer does he flourish a laminated copy of the Contract at the slightest opportunity. Its proposals, says Mr Gingrich, "are not written in stone".

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