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Senate leaders push for budget compromise

Senate Democratic leaders, facing a Friday deadline, are said to be pressing for a compromise on the budget package that would include a transportation fuels tax and deeper cuts in Medicare spending.

The leaders are focusing on cost-saving proposals by Sen. Bill Bradley, D-N.J., to eliminate tax loopholes favored by the Clinton administration and contained in the House-passed version. They also are looking at a plan to scale back or eliminate proposed increases in the earned-income tax credit and funding for food stamps and childhood immunizations.

Senate Majority Leader George Mitchell, D-Maine, said the Senate Finance Committee probably would begin a markup of the package by midweek. The committee plans to resume negotiations today. "We're going to get a budget out of committee this week and we'll pass it on the floor next week," Mitchell said.

Just how Mitchell and committee Chairman Daniel Patrick Moynihan, D-N.Y., intend to overcome the objections of several committee Democrats remained unclear.

Sen. Max Baucus, D-Mont., has said repeatedly he would oppose a transportation fuels tax and would insist on either a broader energy tax, along the lines of the one abandoned by the administration last week, or no energy tax at all. A Baucus aide insisted Monday that the transportation fuels tax proposed by Sen. John Breaux, D-La., is "a non-starter."

Sen. John "Jay" Rockefeller IV, D-W.Va., reflecting the views of at least a dozen other Senate moderates and liberals, has vowed to oppose the budget package if it cuts too deeply into Medicare and Medicaid spending.

The Senate is seeking agreement on an overall plan for reducing deficit spending by nearly $500-billion over the next five years through a combination of tax increases on the wealthy, some type of energy tax, spending cuts and cuts in entitlement programs such as Medicare and Medicaid.

The House-passed version contains more than $50-billion in Medicare and Medicaid spending cuts over five years, but additional cuts would be necessary to make up for the revenue lost by dropping Clinton's energy tax proposal.

Moynihan has proposed offsetting the energy tax revenue losses by cutting another $35-billion from the Medicare program over the next five years, but Mitchell said the reductions would be lower.