Clinton Scrambles to Deal With Democratic Fussbudgets : Economy: With a close vote likely, President gives in on deficit-reduction items to cajole backers. Boren defects, but White House dismisses action.

Sen. Richard H. Bryan (D-Nev.) had a problem with President Clinton’s budget package. And as the bargaining between the White House and Capitol Hill over the controversial legislation turned feverish this past weekend, whenever a Senate Democrat had a budget problem, the President had one too.

Nevada lives and dies with gambling and entertaining, and Bryan feared that Clinton’s proposed reduction in corporate tax deductions for business meals and entertaining would hit Las Vegas hard.

For weeks, the restaurant industry had been lobbying furiously to kill the change in business-meal deductions, but to no avail. Clinton needed the money to help meet his deficit-reduction targets, and he wasn’t budging.

But last Friday, Clinton began to budge. The White House and Democratic leaders on Capitol Hill were scrambling for every vote to win final passage of the President’s economic plan this week, and they realized that they desperately needed Bryan’s support.

The last time the Senate voted on Clinton’s budget, Vice President Al Gore had to break a tie, and the White House could not afford any more defections.

So last Friday morning, the White House and congressional budget negotiators gave in, agreeing that the deduction for business meals, slated to be reduced to 50%, would be hiked up to 65%. But that still wasn’t good enough for the senator from Nevada.

By Friday night, the deduction was back to 80%, the level that exists under current law.

Without hope of winning any Republican votes for his budget, Clinton has been forced to cut deals in order to hold the swing Democrats he will need to ensure passage of his plan.

His troubles have been most pronounced in the Senate, where a number of moderate and conservative Democrats are fearful of being labeled tax-and-spend liberals during next year’s election races. Their threats to desert the White House have forced Clinton to curry favor and compromise with almost anyone willing to listen.

On Sunday, the President spent part of the day telephoning and cajoling Democratic lawmakers who are still not with him.

But Sen. David L. Boren (D-Okla.), who went along with the legislation when it first passed the Senate but has assailed the current package for weeks, went on CBS-TV’s “Face the Nation” and announced that he “must vote against this plan.”

He said he thought it contained too little in spending reductions, especially for social programs such as Medicare.

The White House quickly dismissed the action. Boren “is calling for more delay, more inaction, more hiding from tough choices at a time when the country and the economy are demanding decisive economic action,” Gene Sperling, a top Clinton economic adviser, said in an interview Sunday.

“We haven’t counted on Sen. Boren for quite some time,” Gore said on the CBS program.

Senate Majority Leader George J. Mitchell (D-Me.), speaking on ABC-TV’s “This Week With David Brinkley,” predicted a very close vote on the package but expressed confidence that the needed votes will be found.

But those still on the fence are playing the game for all it’s worth.

Sen. Dennis DeConcini (D-Ariz.) didn’t like a provision in Clinton’s plan that would require Social Security recipients--including many in Arizona--to pay a higher tax rate on their benefits.

Until last week, the proposal to raise the tax rate on married recipients with incomes over $32,000 had been impervious to attack. But DeConcini’s vote matters, and now the threshold has been raised to $40,000. Over the weekend, Treasury Secretary Lloyd Bentsen suggested that it might be increased even more.

Even with that change, it isn’t clear that the White House has won DeConcini’s vote. Spokesman Bob Maynes said the Arizona Democrat is also demanding that some mechanism be put in place to guarantee that new tax revenues go directly to deficit reduction.

“Without that mechanism--and a very high degree of confidence that increased taxes will go to deficit reduction--he won’t vote for” the Clinton program, Maynes said.

Perhaps the biggest concession has been won by Sen. Herbert Kohl, a conservative Wisconsin Democrat. Up for reelection next year, Kohl has refused to go along with any gasoline tax increase greater than 4.3 cents per gallon.

The White House, along with liberal Democrats in the House, had been pushing for a much higher gas tax increase--the House proposed a 9-cent hike--to fund a wide array of social programs while still allowing Clinton to meet his deficit-reduction target of $500 billion over five years.

But Kohl and a handful of other Senate moderates, including Sen. Max Baucus (D.-Mont.), did not flinch.

The White House accepted the 4.3-cent increase, forcing a delay in the final House-Senate conference agreement on the plan until at least today, as bargainers scramble for ways to finance the programs without the extra revenues.

But by Sunday, the consequences of the deal-making had become clear. Clinton had backed off his $500-billion deficit-reduction target, allowing it to slip slightly to $496 billion to find funds for social spending to placate House liberals. The White House had also shifted the retroactive effective date of higher tax rates on the wealthy from March 1, 1993, back to Jan. 1, gaining badly needed revenue.

That helped the White House and its allies find a way to hold Medicare cuts to $56 billion over five years, retain a proposed increase of roughly $21 billion in the earned income tax credit for the working poor and allow for the creation of 10 inner-city “empowerment zones” designed to induce businesses to hire poor workers.

All of those measures are critical to the White House’s campaign to hold on to liberal votes in the House, particularly those of the Congressional Black Caucus. In fact, Rep. Charles B. Rangel (D-N.Y.), a respected black leader on the powerful House Ways and Means Committee, demanded and won the White House’s commitment not to give up the empowerment zones despite Senate pressure to cut spending.

With every deal, the budget looks less and less like Clinton’s initial program. Right now, however, Clinton simply needs a win, and with the final vote looming, the White House can only hope that the bargaining has paid off.

“It’s going to be a tough fight, but we are still confident,” Sperling said.

* PEROT ON ATTACK: Texan criticizes Clinton budget plan but ducks questions. A18