Gore puts the wind back into Clinton's sails: David Usborne in Washington on the single vote that saved the President's taxation policy from disaster

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The Independent Online
AT 10.30pm on Friday, the switchboard on Capitol Hill went quiet. The last call had been from the President to the Democratic leadership of the Senate. His exact words we do not know. But the sentiments were surely simple: 'Thank you. Thank you for saving the bill. Thank you for lifting me from the abyss.'

Thus a heart-stopping week of political drama, that at one point was prompting ordinary Americans to telephone Congress with their views at the rate of 250,000 calls an hour, was over. The Senate had passed into law a bill to tackle the federal budget deficit with new taxes and spending cuts. President Clinton, its principal architect and salesman, had been hauled back from the brink of disaster. Neither the vote in the Senate nor the vote 24 hours earlier in the House of Representatives could have been closer.

The package, which will now serve as the President's economic blueprint and which brings to an end an era of Prepulican tax cuts for the well-off, was passed yesterday by just 51-50 votes with Vice- President Al Gore casting the deciding vote to break a tie. Even that result was only ensured by a last-minute decision by Nebraska Senator Bob Kerrey to end his scrupulously public agonising over the deal and support it.

One hour before the vote, he rose on the Senate floor to reveal his decision, and said: 'President Clinton, if you are watching now, as I suspect you are, I tell you this: I could not and should not cast a vote that brings down your presidency.'

In the House, the result was a majority of two, 218-216. Had the numbers come up wrong, Mr Clinton would instantly have been labelled a lame- duck president a full three- and-a-half years before the end of his term. Instead he has been given the opportunity to turn his troubled administration around and build upon the victory. 'It puts political wind back in his sails,' said Mark Siegel, a Washington political consultant who is close to the presidency.

The President greeted the bill's passage with understandable joy. 'What you heard from the other end of Pennsylvania Avenue was the sound of gridlock breaking,' he declared. 'This is just the beginning, just the first step on the way to regaining control of our economic affairs. It is a very, very important beginning.'

The horse-trading to find the magic formula for adoption - a solution that had to satisfy both wings of the Democratic Party - produced a very different package from the one originally tabled by the President. None the less, many of his basic tenets survived. His target of cutting growth of the deficit by dollars 500bn ( pounds 335bn) over five years was missed by just dollars 4bn. And, as proposed, it will be the very rich who will shoulder most of the new tax burden.

Even if it works, however, the package will hardly slay the deficit dragon. It means that the deficit, which otherwise would have grown at an average of dollars 321bn a year until 1998, should expand instead at the more modest rate of dollars 213bn. Thus the total federal debt, instead of being dollars 1,500bn in five years' time, will be dollars 1,000bn. If this seems a disappointing target, it is worth noting that to eliminate the annual deficit entirely, America would have to cancel every cent of military spending. Even then, its books would not quite balance.

To deflect opposition claims that the package amounted above all - in the words of Senate Republican leader, Bob Dole - to the 'biggest tax increase in the history of the world', and simultaneously to bring the conservatives in their own party on board, the Democratic negotiators contrived to give the greatest weight to spending cuts. All told, the package should save dollars 254bn in such reductions, compared with the projected new tax revenues of dollars 242bn.

The spending cuts will come primarily from the defence budget and from setting a ceiling on payments to hospitals and doctors for treatment of the elderly under the federally funded Medicare scheme. None the less, after special pleadings from congressmen, some spending identified for the axe managed to survive: notably a long-ridiculed honey- subsidy programme.

What came easiest, it seems, was the targeting of the new tax provisions at the rich, which thus reversed the Reagan and Bush legacy of tax cuts for the wealthy. According to congressional analysts, more than 90 per cent of all the tax increases in the deal will be paid for by Americans earning dollars 100,000 or more. And a system of tax reductions for the working poor should deepen pockets at the bottom of the income scale.

The only additional burden on the broad middle class - for whom presidential candidate Clinton once promised a cut in taxes - should come from a hardly extravagant 4.3 cent-a-gallon increase in the federal petrol tax: 'a dime a day' for most families, according to the President. It is this gas tax, however, that represents the greatest single retreat by Mr Clinton, who had asked for a broad-based energy tax to raise about three times as much (dollars 71.5 billion) in new revenues.

Curiously, the White House apparently failed to persuade the public that this was not, as the Republicans insisted, a programme aimed primarly at stinging the middle classes. A Time-CNN poll published on Friday suggested that voters were roughly split on whether the programme should be adopted. Overwhelmingly, however, they believed that the middle classes would suffer most from the tax increases.

In its sales pitch to Congress, though, the administration was ultimately successful, in spite of doubts all week over the ability of President Clinton to get tough.

All the stops were pulled out. Almost every cabinet member and available White House staffer had been enlisted to make the case for the package. A 'war room' of 25 officials worked round the clock for weeks, monitoring voting intentions and issuing exhortations.

'In the end, I have to say they did well,' said James Thurber, an expert on government at American University. 'It's always a close vote when you're trying to put through tax increases, especially where you've got little party discipline and rampant individualism in Congress.'

Whether the budget will offer much help in the long run remains to be seen. In the autumn, he will face an equally tough sell with proposals to revamp health care. And ultimately his economic package will be judged by the public on the basis of one simple criterion: the performance of the economy itself.

(Photograph omitted)

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