Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, July 23, 1993 TAG: 9307230017
SECTION: NATIONAL/INTERNATIONAL PAGE: A-3 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
Senior tax writers in Congress also dumped from the deficit-reduction bill a Senate-passed plan to increase capital gains taxes on those with incomes over $250,000. And they voted to remove the present $135,000 annual limit on the amount of wages subject to the Medicare tax.
The action still left negotiators far apart on some major matters, chiefly how much to raise the gasoline tax, how strictly to restrain the growth of Medicare and how much new spending should be allowed for economic incentives and social programs.
"On revenues, we are about halfway there," Rep. Dan Rostenkowski, D-Ill., told his fellow negotiators at an open meeting of their conference. "But there is not much progress on the spending side."
Later, Rostenkowski told reporters that many House members who had talked with him were reluctant to support the proposed gasoline tax because its impact would be focused on large, rural states and only certain industries.
Bargainers are working on a bill, the heart of Clinton's economic program, designed to reduce the budget deficit by $500 billion over the next five years. Half the saving would come from tax increases - mostly on the wealthy - and the remainder from spending cuts and restraints.
The lawmakers agreed to try to limit the Medicare restraints - the biggest spending hang-up - to halfway between the $58 billion, five-year reduction voted by the Senate and the $50 billion reduction in the House bill.
All the decisions are subject to reconsideration until the negotiators reach final agreement on the entire bill. Congressional leaders are hoping negotiators can finish the bill by next Thursday, allowing final action in the House and Senate before a monthlong recess scheduled to begin Aug. 6.
The decisions would require higher-income retirees to pay tax on up to 85 percent of their Social Security benefits. The increase, up from the present 50 percent, would affect only couples whose income, including half their Social Security, exceeds $40,000 and singles earning more than $32,000.
Current law applies only to the 22 percent of Social Security beneficiaries with incomes over $32,000 for couples and $25,000 for singles. Clinton had proposed to tax 85 percent of the benefits of everybody above those levels.
The compromise would bring in $26.2 billion over five years, rather than the $32 billion under Clinton's plan.
by CNB