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House Votes to Increase Debt Ceiling : Budget: The measure to raise the limit by $322 billion goes to the Senate. Congressional-White House talks on cutting the deficit remain stalled.

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TIMES STAFF WRITER

With only eight votes to spare, the House approved a $322-billion increase in the national debt limit Tuesday as White House and congressional negotiators failed again to break a stalemate over a $50-billion deficit reduction package.

Overcoming traditional election-year resistance, the House voted, 221 to 205, to raise the debt ceiling to $3.44 trillion through Sept. 30, 1991, and sent the measure to the Senate. Congress is preparing to depart on a monthlong recess this weekend.

The Bush Administration, appealing for prompt action, has warned that the government would run out of money to pay its bills by Aug. 15 unless Congress increased borrowing authority above the present $3.123-trillion limit.

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President Bush had less success, however, in another meeting with top Democratic and Republican leaders in Congress to discuss ways to make more rapid progress in the three-month talks that seek ways to cut the budget deficit.

“Everybody is frustrated,” said Alixe Glen, deputy White House press secretary. Democrats on Capitol Hill forecast that negotiators would be called back to Washington in late August in a renewed effort to reach agreement on a deficit-cutting pact.

Earlier, White House officials indicated that Bush would try to keep Congress in session to force Democrats to come up with a budget plan. But Glen backed away from that suggestion, noting there are two more months before massive automatic spending cuts are scheduled to take effect.

The debt limit bill faces an uncertain fate in the Senate, where a controversial amendment to lower Social Security payroll taxes next year will be offered by Sen. Daniel Patrick Moynihan (D-N.Y.). The proposal would add to the fast-growing federal deficit.

Any Senate changes in the legislation will require House approval before a bill can be sent to the President for his signature.

Moynihan said that he would modify his original proposal to spread the proposed cut in the payroll tax rate over the next five years. The reduction, to 5.2% from the current 6.2%, would reduce workers’ and employers’ taxes by $6.6 billion in the coming fiscal year, he said.

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While Moynihan’s plan has considerable support, it is opposed by Senate leaders who contend that it would add to the deficit without providing any offsetting revenues.

House Speaker Thomas S. Foley (D-Wash.) said in advance of the House vote that he was prepared to offer stop-gap legislation to raise the debt limit by $73 billion through mid-October to keep the government from running out of cash while Congress is away on its August break.

The House legislation was supported by 175 Democrats and 46 Republicans and opposed by 76 Democrats and 129 Republicans.

An amendment offered by Rep. Byron L. Dorgan (D-N.D.) to remove the Social Security trust fund from federal deficit calculations starting in 1992 sailed through on a 413-15 roll call.

Opponents argued that the proposal would raise the deficit to staggering proportions--about $245 billion if it were in effect next year--and force Draconian budget reductions or tax increases to avoid gigantic automatic spending cuts under the Gramm-Rudman deficit reduction law.

Meanwhile, Republicans continued to seethe over the refusal of Democrats to submit a comprehensive proposal at the budget talks between White House and congressional leaders.

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