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

DATE: THURSDAY, June 7, 1990                   TAG: 9006070448
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/2   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

CALIF. TAX VOTE COMES UP IN BUDGET SESSION

Add another item to the list of things over which budget negotiators disagree: how their talks may be affected by California's vote to double its gasoline tax.

Democrats said Wednesday the fuel tax increase, to be used to improve highways in the traffic-clogged state, shows voters don't flatly oppose all tax increases. Republicans said the vote was irrelevant and did nothing to diminish their opposition to higher taxes.

The opposite views were offered as Defense Secretary Dick Cheney attended the fifth session of talks aimed at slashing next year's federal deficit.

Cheney stuck to the Bush administration's proposal to spend $303.3 billion for the military in fiscal 1991, which starts Oct. 1. But he and lawmakers agreed to study how much money could be saved if U.S. armed forces were reduced by one-fourth, an option Cheney said was already being examined at the Pentagon.

By a 52 to 48 percent margin, Californians voted Tuesday to double their gasoline tax from 9 to 18 cents per gallon. In Washington, the results were watched closely by politicians who for years have equated support for higher taxes with certain electoral defeat.

"It's an indication that the tax revolt . . . has been tempered by a realization that we have to make investments in the country," House Speaker Thomas Foley, D-Wash., said.

House Budget Committee Chairman Leon Panetta, D-Calif., said the outcome showed that Americans will accept higher taxes "if they know it's going for a specific purpose."

But he conceded it might be easier to get support for higher taxes to build highways than for balancing the budget.

"It's not that easy to translate it to deficit reduction," he said.

Republicans played down the vote's significance.

"It won't affect me," said Sen. Phil Gramm, R-Texas, one of the budget negotiators and a vocal opponent of tax increases.

Cheney and lawmakers said their agreement to study a 25 percent reduction in military forces was a way of producing figures to be used for bargaining - not an indication that such a cut was inevitable.

The budget negotiators are trying to limit next year's budget deficit to $64 billion, the target set by the Gramm-Rudman law. The sessions so far have focused on technical issues, and actual bargaining is at least a week away.

The administration says that unless steps are taken, that shortfall could reach as high as $206 billion this year. Failure to come within $10 billion of the Gramm-Rudman target will trigger spending cuts in defense and most domestic programs, an outcome Democrats and Republicans are desperate to avoid.

by CNB