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

DATE: FRIDAY, July 27, 1990                   TAG: 9007270260
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

GOP BUDGET PLAN READIED FOR SUMMIT

The Bush administration readied a budget-cutting plan Thursday that would boost taxes on wine and beer more than five-fold next year, limit the deductibility of state and local income taxes and cut social programs, Republican negotiators said.

Their proposal, to be submitted to congressional Democrats at the 11-week-old budget summit talks, envisioned overall deficit cuts next year of about $54 billion, split about evenly between raised taxes and lower spending, a GOP bargainer said.

As part of the plan, the 3-cent levy on the standard 750 milliliter bottle of wine would be boosted to 76 cents. The tax on a six-pack of beer, now 16 cents, would be increased five-fold to 81 cents, the official said. Combined, the added levies would total $7 billion.

Although details of the package were sketchy, Sen. Bob Packwood, R-Ore., said it included higher excise taxes on alcohol but otherwise resembled the taxes Bush proposed in his January budget.

The new administration proposal would raise about $3 billion by limiting the deductibility of state and local income taxes on federal tax returns, a GOP bargainer who asked not to be identified said. Such deductions would be limited to no more than $10,000, said the negotiator.

The official also said the package would cut benefit programs by $16 billion, including $6 billion from Medicare. It would cut defense spending by about $7 billion - much less than Democrats want - and pare domestic and foreign aid programs by $4 billion more.

by CNB