House Adopts GOP Plan to Balance Budget by 2002 : Congress: A historic, 238-193 vote sends package of broad spending and tax cuts to Senate. Deficit-ending bill would slow Medicare’s growth, curb farm subsidies.

In a giant step toward reversing the federal fiscal policies of a generation, the House adopted a Republican budget Thursday intended to eliminate the U.S. budget deficit by the year 2002 through spending cuts that would reach across the spectrum of American life.

The decisive triumph for House Republicans came on a 238-193 vote, with eight Democrats voting with the GOP and one Republican voting against the plan. Earlier, the House rejected a conservative Democratic alternative designed to ease proposed cuts in education, health and farm programs.

The budget-balancing plan would allocate $350 billion over seven years for a tax cut approved by the House earlier this year, a decision made despite relentless criticism from Democrats and reservations in some Republican quarters.

The plan calls for about $1.4 trillion in savings through 2002, including $282 billion from slowing the growth of Medicare and $17 billion from curbing farm subsidies. It also would abolish hundreds of federal programs and agencies and would cut spending for hundreds of others: from mass transit subsidies to food stamps to the National Endowment for the Arts.

Republicans hailed the budget as not just a way to save money but as a blueprint for remaking the federal government and stripping power from Washington.

“What our vision is for the 21st Century is a vision of taking power and money and control and influence from this city and giving it back to men and women all across this country,” Budget Committee Chairman John R. Kasich (R-Ohio) said in an impassioned floor speech before the vote.

But Minority Leader Richard A. Gephardt (D-Mo.) angrily denounced the GOP plan as a heartless attack on the poor and the elderly. “All of us believe our budget must be brought into balance,” Gephardt said. “It’s a question of how you do it. . . . We must invest in people for the things they cannot do for themselves.”

Attention now turns to the Senate, which began debate on its own budget plan Thursday. Controversy there is likely to center on tax policy. The budget approved by the Senate Budget Committee makes room for a tax cut only half the size of the House-passed tax cut, and some Senate Republicans want to change that.

The House version would grant a $500 per-child tax credit for families earning up to $200,000 a year, cut capital gains taxes and remove the “marriage penalty,” under which a married couple pays more in taxes than two single people with the same combined income.

The budget resolution is just the first step in a long policy-making process that will stretch through the summer and into the fall. The Senate and House versions will have to be reconciled and a final plan adopted. The budget sets revenue targets and spending ceilings for broad categories of federal activities.

But committees with jurisdiction over affected programs must draft legislation to make the potentially painful spending cuts and policy changes needed to bring outlays in line with those targets.

“This is the beginning of six months of hard work, and not the end of a process,” House Speaker Newt Gingrich (R-Ga.) said after the House vote. “We have to turn this into reality.”

Although the outcome of the House debate was never really in doubt, it was momentous enough to attract a rare visit to the House chamber from two Senate Republicans--Majority Leader Bob Dole (R-Kan.) and Budget Committee Chairman Pete V. Domenici (R-N.M.). When the vote was cast, ebullient Republicans erupted into boisterous cheers on the House floor, while the few Democrats who remained in the chamber were silent.

The two-day House debate was marked by sharp partisan divisions, high flying rhetoric and plenty of props.

Democrat after Democrat tried to put a human face on their criticism of the GOP budget by displaying huge photographs of elderly constituents and other people who they said would be victims of the cuts. Democrats repeated their charge that the GOP budget would cut programs for the elderly and the poor to pay for tax cuts for the rich.

Republicans tried to keep attention focused on long-term goals, arguing that the short-term pain of budget cuts must be borne to stimulate economic growth and rescue Medicare from insolvency.

“Today we make a historic choice,” said House Majority Whip Tom DeLay (R-Tex.). “We can protect the status quo or we can make a courageous stand for America.”

The Budget Committee made recommendations on how its savings targets could be achieved by, for example, abolishing the Education, Energy and Commerce departments; reducing subsidies in the federal student loan program and abolishing scores of other government subsidies outright. Those recommendations are not binding but if Congress does not follow them, lawmakers would not achieve the savings needed to meet the budget’s goals.

Before approving the GOP budget, the House rejected three budget-balancing alternatives:

* A conservative Democratic plan, by Reps. Charles W. Stenholm of Texas and Bill Orton of Utah, that would drop the tax cut and restore spending for agriculture, Medicare and education programs. It was rejected on a vote of 325 to 100.

* A liberal Democratic plan from the Congressional Black Caucus, which would restore spending for education and other social programs by cutting defense and hiking corporate taxes. It was rejected 367 to 56.

* A conservative Republican plan that would balance the budget in five years instead of seven. It was rejected 342 to 89.

The vote on the conservative Democrats’ plan was an indication of how far the budget debate has moved to the right since Republicans took control of Congress. The Stenholm alternative made such deep cuts in domestic spending that many lawmakers compared it to the plan drafted by Republicans on the Senate Budget Committee.

Although it won support from less than half the Democratic caucus, it is remarkable that so conservative a plan won even that much support from the minority--including some of the party’s most liberal lawmakers and members of the Democratic Party leadership such as Rep. Vic Fazio (D-West Sacramento).

It drew only 10 votes from Republicans, mostly moderates with reservations about the GOP tax cut. Kasich conceded that the Stenholm alternative moved in what he considers to be the right direction but declared: “The right direction--but the right direction is not enough when you are in the middle of a revolution.”

As the Senate began its debate, which is expected to last into the middle of next week, Democrats there readied a series of amendments to restore money for Medicare, Medicaid, student loans and other popular programs, although no major changes in the Senate Budget Committee plan are expected to win approval.

“The Republican budget makes their priorities painfully clear,” declared Senate Democratic Leader Tom Daschle (D-S.D.). “It tells everyone from schoolchildren and college students to seniors and working families that they are going to have to give more and get less so that the wealthiest families and businesses in the country can get another tax break.”

The Senate plan includes repeal of public financing of presidential campaigns, currently paid for through voluntary $3 checkoffs on income tax returns.

Times staff writer Jonathan Peterson contributed to this story.

* VETO THREAT IGNORED: House passes spending cut bill as GOP warns that veto would delay emergency relief. A26

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Highlights of House Plan

The biggest hits in the House budget plan passed Thursday, for seven years beginning in 1996:

“Mandatory” Spending Programs

Cuts from projected levels under current law (Cuts in billions):

Medicare: $282

Medicaid: $184

Student loans: $33

Farm subsides: $17

“Discretionary” Spending Programs

Cuts from current spending levels (Cuts in billions):

Foreign aid: $29

Energy supply research and development: $6

Human space flight: $5

Community development block grants: $5

Mass transit operating subsidies: $4

The Goals 2000 education program (eliminated): $2

National Endowments for the Arts and Humanities (eliminated): $2

Taxes

Cuts form projected levels under current law (Tax cuts in billions): $350

Source: House Budget Committee

Vote on Balanced Budget

WASHINGTON--Here is how members of the California delegation voted on a resolution calling for a balanced budget by the year 2002:

Republicans for--Baker, Bilbray, Bono, Calvert, Cox, Cunningham, Doolittle, Dornan, Dreier, Gallegly, Herger, Horn, Hunter, Kim, Lewis, McKeon, Moorhead, Packard, Pombo, Radanovich, Riggs, Rohrabacher, Royce, Seastrand, Thomas

Democrats for--Condit

Republicans against--none

Democrats against--Becerra, Beilenson, Brown, Dellums, Dixon, Dooley, Eshoo, Farr, Fazio, Filner, Harman, Lantos, Lofgren, Martinez, Matsui, Miller, Mineta, Pelosi, Roybal-Allard, Stark, Torres, Tucker, Waters, Waxman, Woolsey

Democrats not voting--Berman