Amendment to Balance Budget Fails in Senate : Deficit: Measure lacks 4 votes of two-thirds needed. House seen passing controversial proposal in gesture.

With President Clinton leading the opposition, the Senate narrowly defeated a constitutional amendment Tuesday designed to balance the federal budget within seven years. Advocates of the politically and economically explosive proposal fell four votes short of the required two-thirds majority.

The Senate split, 63 to 37, in favor of an amendment sponsored by Sen. Paul Simon (D-Ill.), but supporters needed 67 votes to prevail in the latest showdown of a long-running Capitol Hill issue.

California’s Democratic senators were on opposite sides, with Sen. Dianne Feinstein voting for the amendment and Sen. Barbara Boxer voting against it.

Only hours before the key roll call, Clinton called the amendment a “recipe for total paralysis” and warned that it would endanger the economic recovery. Simon’s amendment would have forbidden deficit spending after the year 2001 unless three-fifths of the House and Senate approved.

Senate Minority Leader Bob Dole (R-Kan.) countered: “The balanced-budget amendment may not be perfect but, absent political courage, it may be the only way we will ever eliminate the federal deficit.”

Supporters of the proposal promised to keep up the fight. As Simon put it: “This isn’t going to die. The deficit will keep piling up.”

Thirty-four Democrats and three Republicans combined to block passage of the Simon amendment. Forty-one Republicans and 22 Democrats voted for it.

“We’re not through,” said Sen. Strom Thurmond (R-S.C.), a principal sponsor. “We’re going to continue until we get it passed.”

The National Taxpayers’ Union, a leading advocate of the Simon amendment, termed the outcome “a temporary triumph” and NTU Chairman James Davidson added: “This issue will not die, and the House of Representatives can give the amendment new momentum when it comes to a vote there this month.”

Although the House is expected to approve a balanced-budget amendment, the measure appears to be dead at least for this session of Congress. The Constitution can be amended by a two-thirds vote by both the Senate and House and ratification by 38 states.

Senate aides said it is unlikely that the Senate will vote again this year on the issue, which has divided liberal and conservative lawmakers of both parties for more than a decade.

The Senate passed such an amendment in 1982, but the House did not act. In 1986, the Senate fell one vote short of approving a similar proposal, and the House came within nine votes of passing a balanced-budget measure in 1992.

Familiar arguments were made during this year’s weeklong debate. Proponents of the amendment said that Congress would never develop the discipline to check perennial red-ink spending without a constitutional mandate. Opponents contended that the proposal is a gimmick that would prove unworkable and would be unnecessary if lawmakers made tough choices to reduce spending.

Unlike in previous years, however, Tuesday’s Senate vote came at a time when the nation’s red-ink crisis finally appears to be on the wane.

The latest Clinton Administration forecasts show the deficit declining next year to $176 billion, down from a peak of $290 billion in 1992. Responsible is a combination of an improving economy, which is generating increasing tax revenues, and the package of tax hikes and spending cuts enacted by Congress last year.

The nonpartisan Congressional Budget Office likewise has forecast a steadily declining deficit and reported that the crisis is effectively over for the remainder of the decade.

Unlike former Presidents Ronald Reagan and George Bush, Clinton strongly opposed the balanced-budget proposal. In the Senate, Majority Leader George J. Mitchell (D-Me.) and Appropriations Committee Chairman Robert C. Byrd (D-W.Va.) orchestrated the opposition, while Simon joined with a large group of conservatives to support the measure.

In his concluding remarks, Mitchell accused the proponents of “political posturing” that would avoid tough budget-cutting decisions while appearing to favor them. “It would be an abdication of our responsibility to succumb to the temptation to cast the easy vote for this proposal,” Mitchell said. “It’s a gimmick, a very transparent gimmick.”

The strategy that apparently blocked adoption of the amendment involved the introduction of an alternative sponsored by Sen. Harry Reid (D-Nev.) that would exempt Social Security and capital investments from the budget-balancing requirements and allowed for their suspension in times of recession.

While opponents contended that Reid’s proposal was a sham too weak to restrain deficit spending, proponents argued that it would prevent budget-balancing at the expense of senior citizens and provide needed flexibility in government outlays during recessions.

Reid’s plan was defeated 78 to 22, falling 45 votes short of the required two-thirds majority.

Although only 22 senators sided with Reid, they included several who later opposed the Simon version, providing the essential votes to block its adoption. Opponents said that these senators could now tell constituents that they voted for a balanced-budget amendment.

Among the 22 supporters were six Democrats and four Republicans who will stand for reelection this fall, including Feinstein. Boxer also voted for Reid’s version of the amendment.