Weary Congress Approves Plan to Cut Deficit by $14.7 Billion : Budget: The spending reductions and revenue measures rely on a mix of real and artificial savings. President Bush is expected to sign the bill.

Congress approved a $14.7-billion deficit-reduction bill early today that relies on a mixture of real and artificial savings, sending weary lawmakers home for the rest of the year.

The House adopted the measure by a vote of 272 to 128 and the Senate passed the bill soon after on a voice vote. President Bush is expected to sign the legislation.

Congressional leaders praised the bill as the best that could be accomplished given the lack of consensus between a Republican White House and a Democratic-controlled Congress. The bill, said Senate Budget Committee Chairman Jim Sasser (D-Tenn.) “is not exactly a thing of beauty but it is a solid deficit reduction package.”

Combined with the 13 separate spending bills previously approved by lawmakers, the budget bill is expected to cut the federal deficit this fiscal year to about $124 billion from a $152-billion deficit last year, according to congressional budget officials.

In addition to the $14.7 billion in spending cuts and revenue measures that conform to the standards laid out in last April’s budget agreement between congressional leaders and the White House, the legislation also includes slightly more than $3 billion in one-time savings from accelerated tax collections and shifts in outlays from one year to another.

In addition, lawmakers agreed to raise the ceiling on wages subject to the Social Security payroll tax so that those earning above $50,400 next year would end up paying roughly an extra $100 in Social Security taxes.

The increase in Social Security taxes is part of a scheme that also raises benefits in the future, so that the government will suffer a net loss over the long run.

The White House, which had threatened that President Bush would veto any deficit measure that failed to achieve at least $14 billion in budget savings, termed it an “excellent” bill.

Richard G. Darman, Bush’s budget director, called the measure the “best of both options” compared with the original versions approved by the House and the Senate, but warned that disputes over the specific language of the bill might tarnish slightly the final product.

The bill is designed to mitigate the effects of $16.1 billion in across-the-board spending cuts that took effect last month because Congress failed to meet the deficit target called for under the Gramm-Rudman deficit reduction law.

In struggling to meet the standard established by Bush, however, lawmakers agreed to keep in place about $4.6 billion in automatic cuts. Programs such as Social Security and food stamps are exempt from the Gramm-Rudman meat-ax approach to budget trims, but the bill will require trims of more than 1% from a wide variety of domestic and defense expenditures.

The legislation also contains a sweeping change in the way Medicare pays doctors, a change that is expected to lead to a major shake-up in physicians’ fees after the provision goes into effect in 1992.

And lawmakers made several other cuts designed to help rein in the runaway costs of the health insurance program that provides care for more than 33 million elderly and disabled Americans. Although the changes are relatively modest this year, they suggest that lawmakers will be forced to return to Medicare next year in an effort to narrow the budget gap.

Darman told reporters that he expects to recommend further cutbacks in Medicare and other benefit programs to achieve the $64-billion deficit target for fiscal 1991 called for by Gramm-Rudman. Even with substantial anticipated cuts in military spending, “the size of the (remaining) gap will be large enough it will be necessary to do something substantial with entitlements,” he said.

The final outcome of the deficit-reduction bill is the result of an off-again, on-again confrontation between the White House and Congress over fiscal priorities. After an initial agreement last April that papered over most differences, the budget legislation became embroiled in a bitter partisan struggle focused on Bush’s campaign to reduce capital gains taxes.

After being rebuffed by the Senate on capital gains, Bush dug in his heels against some of the gimmicks included in the original budget agreement, forcing lawmakers to accept at least a partial across-the-board cut as Bush’s price for going along with the overall measure.

In addition to those modest across-the-board cuts, the measure imposes about $6.2 billion in other selective spending cuts aimed chiefly at farm subsidies and Medicare providers.

The bill continues indefinitely an 8% airline ticket tax that was scheduled to expire at the end of the year, boosts the international airline departure tax from $3 to $6 for tickets bought after the end of this year, and imposes a new $6 tax on cruise ship passengers.

The bill also includes a host of comparatively minor tax increases aimed mostly at business--increases that Administration officials accepted as outside the scope of Bush’s “no new taxes” pledge. These include tightening interest deduction rules on employee stock ownership plans, taxing the production of ozone-depleting chemicals and imposing a 5-cents-per-barrel tax on oil to fund a $1-billion cleanup fund for oil spills.