Clinton Appeals to Public on Budget : Economy: In TV address, President seeks support for getting Congress to pass $496-billion deficit reduction. Republicans attack mix of tax hikes and spending cuts.

President Clinton made a nationally televised plea Tuesday for Americans to follow the “bold step” of his economic program, urging them to speak out in support of Democratic congressional efforts to pass his $496-billion deficit-reduction bill.

“There are now only two choices--our plan or no plan,” Clinton declared in the broadcast from the Oval Office. “It won’t be easy and it won’t be quick, but it is necessary . . . . Without deficit reduction, we can’t have sustained economic growth.”

The 20-minute address was the latest phase in an intense Administration lobbying campaign as the plan moves toward final action by Congress in the most important test of the young Clinton presidency. As Clinton and his Cabinet worked feverishly Tuesday to sway undecided lawmakers, Republican adversaries pounded away at the mix of tax hikes and spending cuts as standard tax-and-spend Democratic politics and warned that the legislation is likely to flatten the nation’s economic recovery.

In his remarks, Clinton stressed that the budget plan is the only way out of “economic danger” and that it lives up to “every one of the principles” he outlined in his economic package.

“At stake is the very survival of the American dream,” he said, urging listeners to ask their senators and representatives to support his plan. “We can’t afford not to act.”

Clinton used charts to repeat familiar arguments that the plan would be fair to all Americans. He said that it would take the most “from those who make the most,” that it protects older Americans from “punitive” cuts in Social Security and Medicare” and that it “keeps the faith” with working families by giving tax breaks to the working poor.

Without mentioning any adversaries by name, he said: “The guardians of gridlock will do anything to preserve the status quo.” He called the plan “a bold step and the first step on a journey to give our nation a comprehensive economic strategy.”

Clinton stressed that the tax plan would cost middle-income Americans very little. He said working families earning less than $180,000 a year would have “no increase in their income taxes.”

And, he said, average working families would pay only an additional $3 a month, or a dime a day, in the form of a 4.3-cent increase in the 14.1-cent federal tax on a gallon of gasoline.

To bolster his arguments that the plan would deliver on its deficit-cutting promise, Clinton announced that he would sign executive orders today designed to ensure deficit relief. One would set up a “deficit reduction trust fund” to ensure that tax revenues would be set aside for deficit reduction. A second order would require the President and Congress to set targets to control entitlement spending.

In a Republican response delivered moments after Clinton’s address, Senate Minority Leader Bob Dole of Kansas jabbed at the tax increases as the largest in “world history.”

“The President says the tax increases will only punish upper-income Americans, as if that was something to celebrate,” Dole said. “Well, he’s wrong. Under his plan, millions of you who might think you were a member of the middle class will be paying more in taxes.”

If the package is approved, “more than 800,000 small businesses, over 5 million senior citizens and millions of others will soon be sending more hard-earned dollars to Washington.”

Dole knocked the package for backdating the income tax increase to Jan. 1, 1993. “Never before in American history has the government increased tax rates retroactively,” he said. And he said 80% of the planned spending cuts are not scheduled to occur until after the 1996 presidential election.

Although the American public was the direct audience for Clinton’s appeal, his indirect target was the lawmakers who hold the swing votes that will determine whether his package squeaks through Congress. After six months of debate, the House is expected to vote on Thursday and the Senate on Friday on an economic plan that in its latest form includes about $255 billion in tax cuts and $241 billion in new taxes.

Oval Office addresses can give a President a bounce of several points in opinion polls but presidents traditionally use them infrequently and only in the most serious circumstances. Clinton has addressed the nation from the White House only twice: before he released his economic plan in February and last month on the evening when he sent missiles to destroy the Iraqi intelligence headquarters in Baghdad.

Suspense built Tuesday on Capitol Hill as Clinton appeared to gain some support from wavering Democrats in the Senate while he seemed to suffer some slippage in the House. But the outcome remained too close to call.

In the Senate, where Democrats need to change the mind of at least one of seven opponents of the bill, all eyes were on Sen. Dennis DeConcini (D-Ariz.), a moderate who voted against the Senate version of the legislation in June but who recently won a major concession that will reduce the number of Social Security recipients who pay higher taxes on their benefits.

DeConcini, who faces a tough reelection battle next year, said he would reveal his decision today.

But congressional sources said Democrats were becoming increasingly confident that he would support the package. When Clinton praised the senator in his Tuesday night speech and credited him with the idea for the deficit-reduction trust fund, some saw it as a sign that Clinton is certain of DeConcini’s vote.

“When the President announced DeConcini’s name, I said to my colleagues in the cloakroom, ‘Dennis is on board,’ ” Sen. Barbara Boxer (D-Calif.) said.

Sen. Dianne Feinstein (D-Calif.), who had voted for the earlier version but has said that she is undecided about the compromise, also was a focus of concern from Democratic vote counters. But Feinstein, on PBS’ “MacNeil/Lehrer Newshour” on Tuesday night, welcomed several late changes made by House-Senate conferees to help the ailing California economy and seemed prepared to vote for the legislation.

Those revisions include stripping out a capital gains tax surcharge on wealthy Americans, providing economic incentives such as extended research and development tax credits and the creation of urban enterprise zones. “If it does not pass it will seriously jeopardize the future of the nation,” she said.

Analyzing the uncertainty of several senators, however, Sen. Joseph R. Biden Jr. (D-Del.) said he assumed the vast majority are bluffing. “There are certain people here who are just absolutely, incredibly tenacious,” he said. “Yet, most of the time, when the final gong goes off, they lay down their weapons and vote for” the bill.

The Senate barely approved its version of the bill in June, 50 to 49, with Vice President Al Gore breaking a tie. But since then, Sen. David L. Boren (D-Okla.) has declared that he is going to switch and vote against the bill in its final form.

As Democratic leaders twisted arms, Republicans issued warnings. “If you switch you’re dead--you’ll never get reelected,” Dole said.

Another GOP opponent, Sen. Phil Gramm (R-Tex.), virtually conceded defeat.

“I believe it is going to pass . . . because the Democrats have convinced members of Congress that they ought to put Bill Clinton and his survival in front of the well-being of the country,” Gramm said.

In the House, the situation was more fluid. A senior aide to the Democratic leadership confided that six or seven members who voted for the House bill last May plan to switch sides. Since that measure went through by a six-vote margin, their defection could be fatal unless Democratic leaders can find other votes for the plan.

On the initial House budget legislation, all 37 Democrats in the Congressional Black Caucus supported the bill. But that unity was shattered on the compromise measure reported by Senate-House negotiators. Rep. Cleo Fields of Louisiana said he would oppose the bill this time and two others--Rep. Barbara-Rose Collins of Michigan and Rep. Earl F. Hilliard of Alabama--remained undecided.

In another switch, Rep. Carolyn B. Maloney (D-N.Y.), who opposed the bill last time, said she would vote for the modified version. “It’s not a perfect package but it’s an honest one . . . a better bill than I voted against. It’s time for all Americans to rally behind our President and ask what we can do for our country,” she said.

Speaker Thomas S. Foley (D-Wash.) said that he is “confident but not complacent” and that he would accept a one-vote victory in the House for the final version.

Times staff writers Karen Tumulty, David Lauter and Michael Ross contributed to this story.

Pitching His Plan

Among the selling points President Clinton made Tuesday in his bid to drum up support for the deficit reduction plan:

THE NEED TO CUT DEFICIT

* “Our nation is in economic danger and now we’ve got to take this problem we inherited, you and I, and do something about it.”

* “Now there are only two choices: out plan or no plan.”

ON TAX HIKES

* “I don’t like taxes any more than you do.”

ON SPENDING CUTS

* “Rather than the games and gimmicks of the past, this plan has more than 200 specific spending cuts.”

GOP REACTION

* “As you wade through all the numbers and promises, keep in mind that passage of this bill will affect your job, your business, your family and your retirement.”--Sen. Bob Dole