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Bentsen: Energy tax will not grow

Treasury Secretary Lloyd Bentsen said Sunday that any tax on energy under the budget plan will not add to transportation costs more than the Btu levy passed by the House of Representatives.

But speaking on ABC's This Week with David Brinkley, the former U.S. senator from Texas emphasized that whatever energy tax is finally hammered out next week by the Senate should continue to target consumption.

"I am convinced that for truckers, for the aircraft industry, for railroads, for people driving their cars that the energy tax won't be any higher than what was proposed in the House," Bentsen said.

His remarks come as divided negotiators work toward a Friday deadline on the budget proposal in which taxes on energy continue to be a major stumbling block.

Bentsen, who has served as point man on administration energy tax policy, said that it was critical to American economic policy for the Congress to complete work on President Clinton's overall budget plan that calls for a $500-billion reduction in the deficit over five years.

He warned that the low interest rates the United States is currently enjoying could be threatened if the action to cut the budget was delayed.

"Where you now have the lowest long-term interest rates in 20 years, you could get a substantial up spike in that interest rate, which normally is followed by a drop in the stock market," he said.

The dispute over how to tax energy and failure of the Btu tax, which would have levied a tax on the heat producing property of fuels, has unleashed a controversial search for other ways to meet the deficit reduction targets, including new cuts in Medicare.