Clinton Vows to End a Minority Tax Break : Legislation: He says he’ll sign bill eliminating special benefit for the broadcast industry. Democrats urged veto due to high-profile exception.

Efforts to roll back affirmative action approached their first tangible results Thursday as President Clinton vowed to sign a bill that would end special tax breaks for minority owners of broadcast properties while expanding health care tax benefits for the self-employed.

Clinton said that he would sign the measure despite a last-minute eruption of controversy in which nearly 150 House Democrats urged him to veto the bill. They are angry because the measure makes one exception on the media sales tax break, giving a one-time, $63-million tax break to media magnate Rupert Murdoch in the sale of a TV station to minorities.

The critics, including House Minority Leader Richard A. Gephardt (D-Mo.) and Minority Whip David E. Bonior (D-Mich.), also faulted the measure for failing to include language that would have stopped wealthy citizens from escaping taxes by renouncing their citizenship.

But Clinton turned aside their pleas, saying in a statement that he could not veto a measure that would give “important benefits . . . to our nation’s self-employed and their families.” The language for Murdoch, inserted in the bill at the urging of Sen. Carol Moseley-Braun (D-Ill.), was “a special exception for one pending deal,” but also “the kind of dealing that goes on all the time,” Clinton said.

The tax break for the self-employed would allow 3.2 million Americans to deduct 25% of their health insurance premiums for 1994, expanding to 30% for the 1995 tax year.

Democrats raised the issue of Murdoch’s treatment on the House floor Wednesday, charging that the deal stemmed from his much-criticized relationship with House Speaker Newt Gingrich (R-Ga.), whose book is being published by Murdoch-owned HarperCollins. They suggested that Moseley-Braun was too junior a member to have arranged the dispensation without the influence of a more powerful member. Moseley-Braun portrayed her help as no more than routine assistance for home-state interests.

Murdoch has a contract to sell Atlanta station WATL-TV for $150 million to Qwest Inc., which is 55% owned by minorities, including record executive Quincy Jones, TV entertainer Geraldo Rivera and former pro football star Willie Davis. Another 45% is owned by the Tribune Co., which publishes the Chicago Tribune, the most influential paper in Moseley-Braun’s state.

Beneath the Murdoch dispute was simmering anger over the recent battle over the 17-year-old broadcast tax break rules. Designed to increase the presence of minorities in broadcasting, they gave huge tax savings both to companies that sold TV, radio and cable properties to minorities as well as to the minority businessmen themselves.

The program has long been criticized as ineffective and overly expensive. To critics, the most egregious recent example was a proposed transaction that would have given media giant Viacom about $600 million in tax benefits and would also have made several million dollars for a minority broadcast owner who helped write the rules as a Federal Communications Commission lawyer.

Still, many House Democrats have defended the program. (Clinton had proposed reforming it.) And some have been enraged that the Republicans, in trying to repeal it, combined it with the new tax break for the self-employed--producing a bill that many House members found difficult to vote against.

The end of the minority tax break will generate $2.8 billion in taxes over 10 years, analysts have predicted.

Clinton vowed that he would continue to look for ways to change the law benefiting expatriate billionaires, who some House Democrats call “billionaire Benedict Arnolds.” He said he was “troubled” by the loophole, which costs taxpayers $3.6 billion over 10 years.

Separately, White House Press Secretary Mike McCurry said that Clinton “obviously is inclined” to veto the $189-billion tax-cut bill that passed the House on Wednesday if it clears the Senate in its current form. Treasury Secretary Robert E. Rubin and Alice Rivlin, director of the White House Office of Management and Budget, have urged him to do so.

The implied White House veto threat came even as Sen. Phil Gramm (R-Tex.) claimed at a press conference that there is “a growing base of support” in the Senate for a tax cut.

Gramm also circulated a “working sheet” containing about $80 billion in spending cuts over the next five years that could be made to help fund the $189 billion in tax cuts approved Wednesday night by the House.

As something of a show of good faith, Gramm’s list of potential spending cuts includes several programs that would adversely affect Texas.

Gramm’s contention of growing support in the Senate for a tax cut drew skepticism for several reasons. For one thing, he refused, when asked, to name any Senate colleagues who might agree with his assessment, saying only that “roughly a dozen people” have been contemplating his list and seem receptive to his approach.

But not among them, Gramm conceded, are Senate Majority Leader Bob Dole (R-Kan.) and Sen. Bob Packwood (R-Ore.), chairman of the Finance Committee. A handful of other Republicans--and many Democrats--have expressed their strong reservations about putting a tax cut ahead of deficit reduction.

One of them, Sen. Russell Feingold (D-Wis.), said of Gramm’s claim: “I’d dispute that.”

The Republican tax cut is “entirely irresponsible,” Feingold said.

Gramm acknowledged that the ultimate size of any tax cut that the Senate might adopt remains “an open question.”

Times staff writer Edwin Chen contributed to this story.