US budget compromise in sight

WASHINGTON - President Clinton appeared last night to be negotiating his way towards a political compromise with Democrats on Capitol Hill that should allow his budget proposals to be approved in the House of Representatives today, writes David Usborne.

The fate of the budget package, on which Mr Clinton has pinned his presidency, remains uncertain, however, and White House officials conceded that, with several conservative Democrats still unhappy with provisions for an energy tax, it may pass with only a thin margin.

An alternative plan favours eliminating the energy tax and replacing it with additional spending cuts on social benefits such as Medicaid.

After consultations with Democrat members, the President acknowledged that the energy tax provisions still represented a 'big hang-up' in his negotiations, but none the less expressed guarded optimism that his package would win through.

'I think it is now apparent to everyone that there's only two plans on the table . . . and ours is far fairer and better for the economy,' the President declared. His proposals call for dollars 340bn (pounds 222bn) in tax increases and spending cuts over four years as a means of attacking the federal deficit.