Gas Tax Snarls Budget Debate : Deficit: An amendment to delete the 9.5-cent-a-gallon increase threatens the entire bipartisan Senate package. Leaders of both parties scramble for votes.

The Senate hit a major snag Wednesday over whether to increase the federal gasoline tax, raising doubts about whether the $500-billion deficit reduction package hammered out by leaders of both parties could be passed intact.

Balloting on a 9.5-cent-a-gallon boost in the gasoline tax was billed in advance as a test vote on the broader budget package: If senators voted to keep the gasoline tax provision, the budget measure would pass intact. If it failed, the entire package would be doomed.

But by Wednesday evening, Senate leaders found themselves facing a sea of potential amendments to the package that effectively would have tied up the chamber all night, pushing the legislation dangerously close to the midnight Friday deadline for completing the budget.

As the Senate moved toward a late vote on an amendment to eliminate the gasoline tax increase from the package, Democratic and Republican leaders spent most of the afternoon scrambling for votes. The amendment was sponsored by Sen. Steve Symms (R-Ida.).

By early evening, the outlook for the amendment was uncertain at best. Debate continued late into the night.

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

Bush has said he favors the Senate’s plan over that voted Tuesday by the House. The House measure, approved 227 to 203, would raise taxes for all Americans, particularly for those in higher-income brackets.

“It’s a toughie,” said Sen. Lloyd Bentsen (D-Tex.), chairman of the Senate Finance Committee, who led 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.”

Majority Leader George J. Mitchell (D-Me.) and Minority Leader Bob Dole (R-Kan.) warned that eliminating the gasoline tax, resulting in the loss of $42.6 billion in revenue over the next five years, would scuttle their efforts to pass a budget plan endorsed by Bush.

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

In a party-line vote, the House on Tuesday night defied Bush’s veto threat and approved the Democrat-sponsored plan that would raise taxes, primarily on the rich but hitting all taxpayers to some degree, 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.

Assuming that the Senate can pass its version of the legislation, negotiators for both chambers would hammer out a final compromise bill for ratification by Congress before it is sent to the President for his consideration.

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 expects the President to sign another stopgap spending resolution if the lawmakers show that they mean business about passing a deficit reduction plan along the lines of the Senate committee’s bill. Senate progress slowed to a crawl Wednesday, however, as supporters worked behind the scenes to try to round up the 51 votes needed to defeat the Symms amendment.

Symms, who said he opposes 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.

But Dole, one of the architects of the budget summit agreement that was defeated by the House, said Senate rejection of the gas tax would doom this second-time-around package too.

In an impassioned speech, Dole said the deficit reduction effort that was started in May would be lost. “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 opposes 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.

Several senators who face reelection contests Nov. 6, however, indicated that they would vote to knock the gas tax provision out of the package, despite the leaders’ warnings. Sen. Kent Conrad (D-N.D.) proposed to trim the increase to 5 cents a gallon, with increases on upper-income taxpayers to make up for the loss of revenue.

Others indicated that they expect 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,” said Sen. Bob Kerrey (D-Neb.). 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,” said Sen. William S. Cohen (R-Me.). “This is not the time to raise the gas tax.”

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