Budget Bill May Bypass Panel, Bentsen Says

Preparing for the approaching Senate showdown over President Clinton’s budget plan, Treasury Secretary Lloyd Bentsen on Sunday stressed a willingness to trim as much as “a third or a fourth” of the proposed new tax on energy, but he also threatened to circumvent the normal Senate committee process entirely if opponents do not accept a compromise on the measure.

With the Senate Finance Committee ready to take up the plan, the President’s top economic advisers huddled at the White House on Sunday to develop a strategy to get the package of spending cuts and increased taxes through the panel and to the Senate floor.

The measure represents by far the most important initiative to emerge from the young Administration, and its success is crucial to Clinton’s escaping a specter of growing disarray and failure.

But the Administration has not yet enlisted the support of any Republicans on the panel--or of a key swing-vote Democrat, David L. Boren of Oklahoma.

Appearing on CBS’ “Face the Nation,” Bentsen reiterated that the Administration was willing to trim the tax proposal and increase spending cuts to address criticism by Boren and other moderates and conservatives.

But Bentsen and Finance Committee Chairman Daniel Patrick Moynihan (D-N.Y.) asserted that some compromise must be reached and that, if necessary, a version of the plan would be brought to the Senate floor for consideration without the committee’s approval.

This is the first time that threat has been voiced in the budget confrontation, and it is clearly intended to increase the pressure on Boren. Such a procedural sidestep would be extremely unusual and highly controversial.

“If you don’t pass this, then you’re going to see policy in disarray,” Bentsen said. “We have fragile recovery going now. You’d have a serious danger of dropping back into a recession and the loss of jobs, and I don’t think any senator wants that on his conscience.”

Bentsen said the White House would be amenable to cutting the proposed $72-billion energy tax by “a third or a fourth, but of course that depends on what the Finance Committee wants to do in the Senate.”

White House Budget Director Leon E. Panetta, one of the officials participating in the Sunday strategy session, said that the energy tax must remain broad-based, in contrast to a gasoline tax that would tend to hit rural areas harder.

He also said that spending cuts must make up fully for any revenue lost by scaling back the energy tax so that deficit reduction still totals $496 billion over five years. But Administration officials did not specify which cuts are receiving greater consideration.

“We think there will be some additional modifications on the Senate side. But in the end, 90% of the President’s plan is still going to be there,” Panetta said. “We are prepared to negotiate. We are prepared to make some modifications so long as the President’s principles are maintained in the overall plan.”

Clinton underscored that point in brief remarks to reporters at his Georgetown University class reunion. “We’re going to stick with the basics of the plan,” Clinton said.

The compromise suggested would not fulfill Boren’s demands for scrapping the proposed energy tax entirely and avoiding such broad-based measures. The so-called BTU tax would be based on the energy content of different fuels as measured in British thermal units.

Said Bentsen: “I would hope that when we finally get this package put together that (Boren) will be supportive of it.”

If not, “I may bypass the committee,” Moynihan said on ABC’s “This Week With David Brinkley.” “I hope not to have to demonstrate how (to bypass the committee), but it’s not hard.”

This could be done by rerouting the measure through the Senate Budget Committee, but the conspicuous departure from normal procedures would greatly intensify conservatives’ attacks and open the Administration to charges of political manipulation.

Moynihan expressed optimism in the eventual resolution of the matter and said he thinks that Clinton must stick with the key economic planks on which he campaigned or run a further risk of appearing to be breaking promises. The President’s decline in popularity stems in part from “paying too little heed to what he had said in his campaign,” Moynihan said.

In addition to Bentsen and Panetta, White House Chief of Staff Thomas (Mack) McLarty and new senior adviser David Gergen participated in the White House strategy session.

Coinciding with Bentsen’s appearance on television, Treasury Department officials released a four-page document stating that failure to implement Clinton’s plan would result in higher interest rates, lower stock prices, a slowdown in economic growth and a $45-billion-a-year increase through 1998 in interests on the $4-trillion national debt.