Clinton Deficit Plan Squeaks Through House by 218 to 216 : Budget: The close vote, with no support from the GOP, comes after White House pledges to offer further spending cuts. President will continue the fight today in the Senate.

In an electric scene as President Clinton’s political fate hung in the balance, the House mustered the precise number of votes needed to approve his deficit-reduction plan Thursday, sending it to the Senate for another nail-biting showdown today.

The House’s approval, on a 218-216 vote, came after the Administration and House Democratic leaders promised to bring up more spending cuts in September and October, before Congress adjourns for the year, to show their continued commitment to deficit reduction.

And the Senate vote is expected to be even closer. Democrats will gladly settle for a tie, which Vice President Al Gore would break. Gore did so when the original Senate version was approved in June, winning passage of the legislation despite solid Republican opposition and defections by six Democrats.

Appearing shortly after the vote in the Rose Garden with Gore and a host of cheering aides, Clinton hailed what he called a “heroic vote.” He vowed to “continue the battle tomorrow” in the Senate for his package of $496 billion in spending cuts and tax increases, including an average “dime-a-day” hike in the gasoline tax.

The House, he said, had succeeded in “breaking gridlock tonight and entering a new era of growth” for the American economy by approving the plan, which promises nearly $500 billion in deficit reduction over the next five years. But, he said, in the legislative arena and in efforts to revive the nation’s economic fortunes, “the fight is still on and we have just begun to fight.”

The House vote ended with one of the most dramatic moments on the chamber floor in recent memory. With no time remaining on the electronic clock that counts down the 15 minutes allotted for members to cast votes, House leaders held open the final tally for several minutes to accommodate four undecided members. The count was two votes short of the 218 needed for approval.

While the House chamber buzzed with anticipation, a mob of Democrats quickly encircled Rep. Marjorie Margolies-Mezvinsky (D-Pa.), who had voted against the earlier House bill, and Rep. Pat Williams (D-Mont.) to urge them to vote yes. Some Republicans chanted: “Let’s make a deal.”

Margolies-Mezvinsky, looking stricken, finally escaped from the ring of her colleagues. Then she and Williams cast the 217th and 218th votes for the bill, guaranteeing its passage.

While Democrats cheered, Republicans taunted Margolies-Mezvinsky by waving to her and singing “goodby, Margie.” The Pennsylvania lawmaker had narrowly won election in a conservative district in the Philadelphia suburbs that had been represented by GOP lawmakers for decades, and her vote undoubtedly will dim her prospects for reelection because she pledged last year to oppose tax rate increases.

Moments later, Rep. Ray Thornton (D-Ark.) and Rep. David Minge (R-Minn.) cast “no” votes to make the final count 218 to 216.

In the end, all 175 Republicans and 41 Democrats voted against the plan.

In the California delegation, 27 Democrats voted for the bill, while three Democrats and all 22 Republicans voted against it. The three Democrats who opposed the budget plan were Reps. Richard H. Lehman of North Fork, Gary A. Condit of Ceres and Calvin Dooley of Visalia.

Afterward, relieved Democrats relished the victory. “The question today really was whether we could govern and I think we demonstrated, under very difficult circumstances, that we could,” House Majority Whip David E. Bonior (D-Mich.) said.

Yet, as Rep. Steny H. Hoyer (D-Md.), chairman of the Democratic Caucus, said, it was “an excruciatingly tough vote.”

The action capped a day of supreme anxiety among Democrats, who had more difficulty than forecast even by Republicans.

Throughout the day, Democratic leaders jawed with wavering members in cloakroom, corridor and coffee shop, succeeding on occasion only to find that another member thought to be leaning toward approval was in fact going the other way. By midafternoon, leadership aides conceded that they were still nine or 10 votes short.

“All of us were pushing very, very hard,” Leon E. Panetta, director of the White House Office of Management and Budget and a former chairman of the House Budget Committee, said afterward. Panetta said the President telephoned a large number of members--some of them three or four times--Thursday. Margolies-Mezvinsky was among those on his list.

The legislation is considered crucial to Clinton because it is a central element of his Administration’s agenda. It also has emerged as a severe test of his ability to push legislation through Congress. Its defeat would cast grave doubts on the future of two other major Administration objectives: health care reform and the North American Free Trade Agreement that would eliminate trade barriers among the United States, Canada and Mexico.

As Administration partisans have been cautious to do throughout this final chapter of the budget battle, Clinton was careful to refer to the current bill as merely a “first step” in the struggle to control the deficit. White House officials have been cautious about the danger of overselling the plan, knowing that, even if it succeeds as advertised, the government’s annual deficit will remain large for years to come.

Describing the next steps he hopes to take, Clinton may have had his eye on Sen. Bob Kerrey (D-Neb.), the remaining, and potentially crucial, uncertain vote in the Senate. Kerrey has criticized the current plan for not going far enough to reduce spending and reshape government, and Clinton adopted some of the senator’s themes in describing the agenda for the fall.

Asked about Kerrey, Panetta told reporters: “He’s still circling.” Attention turned to Kerrey after Sen. Richard H. Bryan (D-Nev.) announced Thursday that he would vote against the plan.

But Thursday’s focus was on the House, where the plan faced the crucial vote before the Senate takes it up today. Congress plans a monthlong summer recess after the votes.

Democrats argued that the plan was a critical first step to gain control of the budget deficit and to preserve low interest rates that would spark an economic revival.

Rep. Martin Olav Sabo (D-Minn.), chairman of the House Budget Committee and a conference committee negotiator on the final version of the bill, said it was time for Democrats to act.

“This package represents the opportunity of a lifetime to turn this country around,” Sabo said. “There will never be a better time to do it. It will get harder, not easier, if we put it off.”

Republicans argued that retroactive tax increases on upper-income Americans would stifle growth and kill jobs while spending cuts would not take effect until after Clinton’s four-year term is over.

“This is not taxing the wealthy--this is taxing America,” Rep. John T. Myers (R-Ind.) complained.

“Quick to tax, slow to cut,” said Rep. Constance A. Morella (R-Md.), criticizing the provisions that make the income tax hike for higher-income Americans retroactive to Jan. 1, 1993, and defer reductions in spending.

Although the Democrats have prevailed so far, Republicans have succeeded in demonstrating that, despite Democratic control of the White House and Congress, they can influence major Clinton Administration legislation, such as health care reform and the free trade agreement.

By voting as a solid bloc, the Republicans have shown that they can, at a minimum, give legislation a strong yank to the political right by forcing the Democratic leadership to offer proposals palatable to the conservative wing of their own party if they are to muster enough votes for approval.

In the struggle over the budget bill, for instance, the House leadership entered into a formal agreement to present new budget enforcement legislation in September and to pursue additional spending cuts before adjourning this year.

The White House also promised that Clinton would seek additional reductions in spending in October that House members may accept or expand, Speaker Thomas S. Foley (D-Wash.) and House Majority Leader Richard A. Gephardt (D-Mo.) said. This list of cuts will include savings recommended by a commission reviewing government operations and efficiency.

Under a little-used power of the presidency, Clinton can ask Congress to cancel previously approved spending in a special request known as a “rescission” bill. Congress may accept his recommendations, substitute its own spending reductions or do nothing.

The House also will be given an opportunity to vote on a pay-as-you-go system for financing future disaster relief bills, the leadership said. In addition, Foley gave assurances that the House will take up a constitutional amendment requiring a balanced budget if it passes the Senate this fall.

One of the most controversial provisions in the deficit-reduction package would slow the growth of payments to Medicare providers--doctors, hospitals and laboratories--by $55.8 billion over the next five years. Although advocates of the cut argued that it would not affect the elderly or disabled who are covered by the program, Medicare proponents said it might affect the quality of patient care.

Similarly, outlays for the Medicaid program for the poor were reduced by $7.6 billion over the next half-decade as part of the deficit-cutting drive.

In addition, in a precedent-setting move, the bill includes a five-year freeze in spending on one-third of federal programs, paid for by annual appropriations, at the same dollar levels that exist now. Proponents of the bill estimated that this provision alone would reduce outlays by $102 billion.

The legislation also contained other, little-noticed provisions that would restrain the growth of federal outlays by more than $32.5 billion over the next five years.

It would lower spending by $11.9 billion for federal retirement programs, primarily by eliminating the option to receive lump-sum pension payments and by delaying cost-of-living raises for federal employees and members of the armed services, starting in 1994.

Sponsors of the bill estimated that it would raise $10.2 billion by auctioning parts of the radio spectrum to commercial users. Another $4.3 billion would be saved by changes in student loan programs; a total of $3 billion less would be spent on a variety of agricultural programs; veterans’ programs would be trimmed by $2.6 billion, and an additional $2.4 billion would be raised by extending custom users’ fees through 1998.

Some provisions would raise spending, including a proposed $2.5-billion increase for the food stamp program and a new $1-billion allocation for a social welfare program designed to keep families together and reduce the amount of foster care.

The compromise bill rejected a widely unpopular energy tax based on British thermal units and replaced it with a 4.3-cent-a-gallon increase in gasoline and diesel fuel taxes.

Times staff writers David Lauter and James Bornemeier contributed to this story.

* RELATED STORIES: D1