Senate Retains Gas Tax Increase : Budget: Bipartisan leadership stops an effort to delete the 9.5-cent-a-gallon boost from its deficit-cutting package. The action clears the way for final approval.

The Senate’s bipartisan leadership staved off a potentially fatal blow to its $500-billion deficit reduction package Wednesday night by turning aside an effort to eliminate a proposed 9.5-cent-a-gallon increase in the gasoline tax.

The leadership prevailed on a 59-40 roll call, burying the attempt to knock out the proposed gas tax increase. California’s two senators split over the issue, with Democrat Alan Cranston voting to keep the tax in the package and Republican Pete Wilson voting to drop it.

Although supporters of the budget plan won their battle, the difficult struggle to retain the gas tax signaled the fragile nature of the Senate coalition seeking to raise taxes and cut spending in the face of strong election-year opposition.

The move cleared the way for final Senate approval of the deficit reduction package, which must be reconciled with a House plan that contains no gasoline tax hike. President Bush has indicated that he would support the Senate plan.

Senate Majority Leader George J. Mitchell (D-Me.) and his GOP counterpart, Sen. Bob Dole (R-Kan.), led the move to derail what they characterized as a “killer amendment” to eliminate the gasoline tax from the bill, saying that it would have destroyed their carefully crafted deficit-cutting plan.

“We’re playing by the rules in an effort to preserve this package,” Dole said. “I’m doing the best I can for President Bush, and the last time I checked he was a Republican.” As for killing the gas tax hike, Dole said: “It would not only unravel the package--it would finish the package.”

Dole said that eliminating the gasoline tax would result in the loss of $42.6 billion in new revenue over the next five years.

The struggle over this issue delayed the Senate’s progress on the overall budget bill. Congressional leaders hope to hammer out a compromise plan in a House-Senate conference and complete congressional approval by midnight Friday.

Earlier, the Senate voted, 67 to 32, to kill an effort by Sen. Kent Conrad (D-N.D.) to raise top-bracket income tax rates to 33%, cut the proposed gas tax increase to 5 cents a gallon and reduce the impact of planned spending cuts on farmers and Medicare beneficiaries.

Failure to act on the budget package quickly could throw the government into another weekend of fiscal chaos, prompting Bush to shut down government services again when the current funding authority runs out, at midnight Friday, as he did on Columbus Day weekend.

The House deficit reduction measure, approved 227 to 203, would raise taxes for all Americans, especially those in higher-income brackets.

“It’s a toughie,” said Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee, who was active in the battle to preserve the gasoline tax provision. “I think we’ll get it (a majority), but it’ll be a hell of a fight.”

The budget package, which had been endorsed, 15 to 5, by the Senate Finance Committee, faced strong election year opposition despite increasing pressure to meet the midnight Friday deadline for final congressional action on deficit-cutting legislation.

In a party-line split, the House on Tuesday night defied Bush’s veto threat and approved a Democratic plan that would raise taxes and reduce spending to reach the $500-billion deficit reduction target.

The House-passed measure would keep federal gasoline taxes at the current 9 cents a gallon.

The White House backed off somewhat Wednesday from its threat to shut down the government if Congress had not finished its work before the government’s spending authority expires.

John H. Sununu, White House chief of staff, said he expected that the President would sign another stopgap spending resolution if the lawmakers showed that they meant business about passing a deficit reduction plan along the lines of the Senate bill. Senate progress slowed to a crawl Wednesday, however, as supporters worked behind the scenes to try to round up votes to defeat the move by Sen. Steve Symms (R-Ida.) to take the gasoline tax out of the package.

Symms, who said he opposed all tax increases in the package, argued that the gasoline levy would weaken the economy and place an unfair burden on commuting workers, rural residents and older people.

“This is a good test of whether we want to raise taxes or freeze spending,” Symms told the Senate.

In an impassioned speech in defense of the gasoline tax hike, Dole said the deficit reduction effort that was started last May would be lost if the increase was deleted. “If we can’t win this one, we might as well wrap it up,” Dole said. “If this amendment passes, count me out.”

Mitchell, who also staked his prestige on the outcome of the vote, agreed with Dole on the importance of retaining the gas tax. “This is a test of the Senate as an institution,” Mitchell warned.

“Do we have the minimum level of courage necessary to do something that is unpleasant, difficult and unpopular? Once we start down that road (of deleting proposed tax increases), this deficit reduction effort will be over.”

Some senators who supported the leaders’ efforts to preserve the gasoline tax in the package served notice in advance that they expected it to be removed or scaled back sharply in a Senate-House conference.

“We can’t pick this apart one item at a time,” said Sen. Dale Bumpers (D-Ark.), who said he traditionally opposed raising the gas tax but would vote to preserve it to get a budget bill into a Senate-House conference, where it might be dropped.

Others indicated that they expected the Senate-House conference to produce a plan that would place greater burdens on wealthy Americans and less on middle-income and lower-income families.

“I want the (Senate) conferees . . . to be fighting for more progressivity,” Sen. Bob Kerrey (D-Neb.) said. But his home state colleague, Democratic Sen. J. James Exon, who is in a tough race for reelection, said he would oppose any tax increases at this time.

“The price of gas is so high now,” Sen. William S. Cohen (R-Me.) said. “This is not the time to raise the gas tax.”

RIGHTS BILL GOES TO BUSH--The House sent a major civil rights bill to the President, who plans a veto. A20

HIGH COST OF GAS--Analysts see no relief in sight from soaring fuel prices. D1