Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, June 9, 1993                   TAG: 9306090250
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: The New York Times
DATELINE: WASHINGTON                                LENGTH: Medium

CLINTON BACKS OFF BTU TAX

Later, Democrats in the Senate met for more than two hours over lunch to try to forge a compromise that would be acceptable to the White House and could command a majority in the Senate. No consensus was reached, but senators said afterward that a different form of energy tax was still likely.

This change of position is by far the biggest concession the president has yet made in his economic plan. But if the rest of the plan is enacted more or less intact, it will be considered a major political victory for the new administration.

The Clinton proposal was vigorously opposed by energy-intensive industries, like petrochemicals, that believe their products would lose a competitive edge in international markets, and by states where those industries are concentrated.

The new version of the energy tax, like the old one, is expected to apply to all forms of fuel, but it would be smaller. Different forms of taxes under consideration would affect various businesses and regions differently.

As recently as last weekend, Clinton's top economic advisers insisted publicly that a tax based on the number of British thermal units generated by different forms of energy was an essential element in his economic plan. A Btu is the amount of energy required to raise the temperature of a pound of water 1 degree Fahrenheit.

But at a picture-taking session on Tuesday morning before he met with congressional leaders from both parties, Clinton carefully avoided saying he would insist on a such a tax.

At a news briefing afterward, the president's press secretary, Dee Dee Myers, clearly following the instructions of her superiors, repeated over and over again every time she was asked about a Btu tax that Clinton was "committed to a broad-based energy tax."

Treasury Secretary Lloyd Bentsen said on Tuesday night, "It will not be a Btu tax."

Tuesday's statements were in sharp contrast with what officials said in public over the weekend. For example, after meeting with the president on Sunday morning, Leon E. Panetta, the budget director, said, "We want to maintain a Btu tax," and he called it "one of the basic principles of the administration's program.

Clinton had said for months that his energy tax was essential because it was the fairest and most environmentally sound way to raise revenue to lower the budget deficit.

The change in course apparently followed Clinton's meeting Monday evening with his main economic advisers and Sens. George J. Mitchell of Maine and Daniel Patrick Moynihan of New York. Mitchell, the majority leader, and Moynihan, the chairman of the Finance Committee, are the most important Democratic senators on tax and budget matters.

According to an official who was there, the senators told the president that prospects for Senate approval of the fuel tax in the form he proposed it were "extremely gloomy."

Clinton, the official reported, said little and mostly listened. But at one point he was said to have emphasized how important it was for him to win Senate approval of his budget plan before he goes to Tokyo early next month for the meeting of the heads of state of the Group of Seven industrialized countries.