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

DATE: TUESDAY, June 8, 1993                   TAG: 9306080135
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A1   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE: WASHINGTON                                LENGTH: Medium

ENERGY TAX MAY BE REDUCED, AT MEDICARE'S EXPENSE

President Clinton and Senate Democrats, seeking new spending cuts to win passage of the administration's economic package, agreed Monday to scale back the energy tax and are moving toward a plan that would wring more savings from the politically sensitive Medicare program.

But the compromise proposal, which would reduce payments to physicians and other Medicare providers so the $71 billion energy tax can be lightened, has alarmed the powerful elderly lobby and risks undermining the president's health-care reform initiative.

The administration already has proposed $53 billion in cuts in Medicare reimbursements. Any further reductions would directly reduce the amount of money available to fund the health-care reform plan being put together by Hillary Rodham Clinton.

The president discussed the spending and tax plan at a late-afternoon White House meeting with Senate Majority Leader George Mitchell, D-Maine, and Finance Committee Chairman Daniel Patrick Moynihan, D-N.Y., who proposed the combination of a smaller energy tax and larger Medicare cuts.

Treasury Secretary Lloyd Bentsen, speaking to reporters after the meeting with the Senate leaders, confirmed the tax would be trimmed and new spending cuts found to help ease passage of the budget bill. He declined to specify where the administration planned to reduce spending, however.

"There'll be a further reduction in the overall broad energy tax and you're going to see further cuts in spending that will be part of the package," Bentsen said. "So we're quite optimistic about the package we're putting together."

Bentsen, Mitchell and Moynihan all pledged to make good on the president's promise to cut the federal budget deficit by a total of $500 billion over the next five years.

Clinton delegated Bentsen, former chairman of the tax-writing Senate Finance Committee, to shepherd the massive tax bill through the Senate. Bentsen was conspicuously absent during the difficult deliberations on the bill in the House, where it passed 10 days ago by a three-vote margin.

While Democratic leaders say that the proposed concession to centrist lawmakers could make the difference between success and failure for the president's program in the Senate, the plan was denounced by advocates for the elderly.

The nation's foremost lobbying organization for Medicare recipients, the American Association of Retired Persons, led the charge. "It would be devastating" to seniors, AARP legislative director John Rother said at a news conference.

The $53 billion of Medicare restraints that Clinton already has proposed for deficit reduction "stretches it to the limit," Rother said, adding that Moynihan's proposal to trim an additional $35 billion from the program would be unacceptable.

Besides angering seniors' groups, squeezing further savings from Medicare threatens the administration's effort to revamp the nation's health-care system and provide coverage for the estimated 35 million uninsured Americans.

by CNB