Newspaper article THE JOURNAL RECORD

Clinton Energy Tax Plan Faces Hard Senate Fight

Newspaper article THE JOURNAL RECORD

Clinton Energy Tax Plan Faces Hard Senate Fight

Article excerpt

Hearst Newspapers

WASHINGTON _ President Clinton rejoiced after the U.S. House of Representatives narrowly passed his controversial budget last week, but the president's sweeping economic plan and its unpopular energy tax face formidable obstacles in the Senate.

In giving Clinton a much-needed victory, conservative House Democrats have already forced the White House to make changes in the original plan, such as agreeing to a mechanism to curb the growth in spending on benefit programs such as Medicare.

But it's the energy tax that likely will be a lightning rod for opposition as Clinton's package of $340 billion in tax increases and spending cuts heads to the Senate this month. As in the House, the administration expects to win solely with support from Democrats, who enjoy a 57-43 margin in the Senate, a margin that would change to 56-44 if, as expected, the Republican candidate wins the June 5 special election in Texas.

Laying in wait for Clinton is a determined group of Senate Democrats, led by David Boren of Oklahoma. They have vowed to shelve the energy tax altogether and to substitute cuts in federal spending to make up the $71 billion the tax is supposed to bring in.

Boren, sending a warning to the White House, said Friday that at least nine other Senate Democrats "have looked me in the eye and said they're not prepared to vote for this package."

Boren added: "They are very, very hard in their view that they're not going to vote for a bill with an energy tax in it."

Ever since the broad-based energy tax was proposed in February, it has become a levy that people love to hate.

To be based on the heat content of most fuels, measured in British thermal units, the tax is the second largest revenue source in Clinton's budget, after income tax hikes on affluent Americans. The levy would drive up the cost of gasoline about 8 cents a gallon and increase the typical family's electric bill by about $2.25.

Because the tax is expected to boost the price of most American-made products, its opponents say it will rekindle inflation and cost jobs.

Although Clinton gamely defended it as a fair and balanced tax _ part of the president's "shared sacrifice" theme _ critics in Congress and lobby groups quickly sought to derail it or change it more to their liking.

The oil industry mounted a fierce campaign against the tax, while industries that use lots of energy, such as aluminum, lobbied intensively for exemptions from the tax.

Some of those efforts paid off.

Either at the behest of the Clinton administration or the House Ways and Means Committee, the bill approved last week by the House provides a host of exceptions to the energy tax, including exemptions on fuel used by U.S. airlines and barges on international routes, natural gas used in enhanced oil recovery for heavy oil, and exported fuels and electricity. …

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