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

DATE: MONDAY, July 19, 1993                   TAG: 9307190119
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A2   EDITION: METRO 
SOURCE: Los Angeles Times
DATELINE: WASHINGTON                                LENGTH: Medium

ONLY GAS TAX LIKELY TO GET BY PANEL

The Clinton administration, giving up its effort to win a broad-based energy tax, conceded Sunday that only a gasoline tax is likely to survive the House-Senate conference committee that is fashioning a final version of the president's economic plan.

"I think the likelihood is that we're looking more at a gas tax than a Btu tax or a utility tax of any kind," said Budget Director Leon E. Panetta in the administration's first public concession of defeat.

Appearing on CBS' "Face the Nation," Panetta said that the administration also hopes to restore some of the Medicare spending that the Senate has voted to cut, as well as tax breaks to help small business.

To compensate for that additional spending, it appears that the ultimate gasoline tax increase would have to be higher than the 4.3-cents-a-gallon levy now on the table in the Senate version of the economic package. Panetta declined to specify how much greater the figure is likely to be.

The size and shape of the energy tax is the knottiest of the hundreds of issues confronting House and Senate negotiators as they seek to produce an economic plan that can pass both chambers before Congress takes a monthlong break in early August.

Divisions over the issue are so sharp that some in Congress have suggested scrapping the energy tax altogether, even if it means falling significantly short of President Clinton's goal of cutting the deficit by $500 billion over five years.

But on Sunday, Panetta repeated Clinton's assertion that he will not give much ground on the $500 billion bottom line. He added that the administration's commitment to the goal has not softened in light of its announcement last week that this year's deficit will not be as high as earlier projected.

"I think we need to stick to that target of $500 billion in deficit reduction," Panetta said. "Look, we're looking at $300 billion deficits into the future." As a matter of fact, [in] 1998, even with these revised deficit numbers, we're looking at a $380 billion annual deficit" unless the government makes major changes in its economic policies.

Panetta's comments also dampen the prospects for one proposed compromise that was making the rounds on Capitol Hill: a gasoline tax combined with a utility tax.

by CNB