Budget vote failure stuns Republicans

The Republicans yesterday suffered their greatest defeat in the new Congress when the Senate rejected the proposed constitutional amendment to balance the budget, a key component of the party's Contract with America and symbol of its plans to put America's financial house in order.

Originally set for Tuesday, the momentous floor vote was finally held yesterday afternoon as Robert Dole, the Majority Leader, conceded failure in his efforts to win over the Democrats he needed to secure the two-thirds majority, 67 votes, required for a constitutional amendment.

When the showdown came, 65 Senators voted for the measure and 35 opposed it, among them the lone Republican hold-out Mark Hatfield of Oregon and Kent Conrad and Byron Dorgan, the two North Dakota Democrats courted desperately by the Republicans, but who refused to abandon demands for cast-iron guarantees that social security funds be excluded from deficit cutting efforts.

The events are not the end of the balanced budget story. Smarting from the setback, Mr Dole vowed to bring the amendment back for a vote closer to the 1996 election season, where it is bound to be an issue.

The Democrats could find themselves savouring a Pyrric victory. Polls show the electorate fears cuts in social security benefits but supports a balanced budget. Hence Mr Dole's terseboast, just before the vote, "We may even win if we lose. Even if we lose, we have the issue."

That same consideration dampened White House satisfaction last night. Although he has deliberately kept on the sidelines of the fray this week, President Clinton is firmly against the amendment. Like many economists, he argues that the obligation to balance the budget could cripple policymakers in times of recession.

But he knows an excess of gloating would hand the Republicans a powerful weapon in 1996. Thus the President depicts himself as a defender of social security and the rights of pensioners. "The amendment was defeated because the Republicans couldn't provide a Social Security guarantee," Mr Clinton said afterwards, challenging his opponents to say where the spending cuts would fall. "The vast majority of Democrats support a balanced budget," added Senator Tom Daschle of South Dakota, the Senate minority leader, in his wind-up speech immediately before the vote.

The outome seems bound to slow the Republican juggernaut on Capitol Hill. The clear shortterm loser is Mr Dole, in his incarnation as frontrunner for the 1996 Republican nomination. No great friend of the Contract of America devised by House Speaker Newt Gingrich and so beloved of conservative activists, Mr Dole is touting his experience, wisdom and ability.

Yesterday, he failed to deliver. The payback could come in the primary season where conservative activists are influential. Already Senator Phil Gramm of Texas, his main rival for the nomination, is criticising Mr Dole for his "misjudgement."

If enacted, and then endorsed by 38 of the 50 states, this amendment would require a balanced budget by 2002. But Republicans have never spelt out where they would find the $1,200bn (£77bn) of cuts required to balance the budget in seven years time. Democrats insist these could be achieved only by raiding the social security reserves. They argue the amendment amounts to a shift in the constitutional balance of power away from Congress

Meanwhile, the Republican presidential field broadened as Indiana Senator Richard Lugar threw his hat into the ring. An authority on foreign affairs, Mr Lugar, 63, joins the former Tennessee Governor Lamar Alexander and Senator Gramm as a candidate. Mr Dole is due to make his formal announcement next month.