House, in Cliffhanger, Passes Clinton’s Deficit-Cutting Plan : Budget: $496-billion bill is approved by a narrow six-vote margin. President calls the vote ‘courageous.’ Measure faces strong opposition in the Senate.

In the most dramatic moments of President Clinton’s new Administration, the House approved his $496-billion deficit-reduction package Thursday by a narrow six-vote margin.

Approval of the controversial economic program in a 219-213 vote came shortly before 9 p.m. after days of arm-twisting by the White House and Democratic leaders desperate to obtain passage of the bill, which calls for one of the largest tax increases in history and major spending cuts in popular federal programs.

Not a single Republican voted for the measure and 38 Democrats--fearful of negative reaction from their constituents--broke ranks and voted against the President. Furthermore, the bill faces strong resistance in the Senate from at least a half-dozen moderate Democrats and most, if not all, Republicans.

Nevertheless, a clearly relieved Clinton, flanked by Treasury Secretary Lloyd Bentsen and Vice President Al Gore, called the House vote “courageous.”

He said House members had “voted for growth over gridlock . . . (saying) no to the status quo, no to the special interests that worked so very hard” to stop the legislation.

Bentsen hailed the outcome as well, saying “today’s vote was a victory for the American economy. The vote should send a clear signal of change in Washington.”

As evidence of the tensions and uncertainty over the vote count, House members stood riveted on the chamber floor as they watched the results being posted on the electronic scoreboards.

The chamber erupted into wild applause as the 217th vote needed for passage was cast by Rep. Bill Richardson (D-N.M.).

Moments later, Speaker Thomas S. Foley announced the result with an almost audible sigh of relief.

Earlier, Foley had prevailed upon his colleagues to “stand and deliver!”

“This is the time to justify your election,” he thundered.

The final victory was attributed in part to an agreement reached shortly after midnight Wednesday on a new procedure to review spending overruns on mandatory benefit programs--such as the skyrocketing costs for Medicare and Medicaid. It apparently convinced some conservative Democrats to vote for the package.

Rep. Charles W. Stenholm (D-Tex.), a leader among conservatives in his party, voted for the Clinton bill even though he said he would reserve the right to oppose it later if the energy tax is not modified to his satisfaction in the Senate.

But the recurring refrain among Democrats who favored the plan was that they could not turn their backs on a President who had advocated the only deficit-cutting program with a chance of passing Congress this year.

“If we don’t vote for this package, we cut him (Clinton) off at the knees and we can’t do that,” Rep. Charles E. Schumer (D-N.Y.) said.

Opponents argued that the bill--which provides for net tax increases of $250 billion and an equal amount of spending reductions over the next five years--would destroy jobs and endanger House Democrats’ survival at the polls if they supported the President.

Even the strongest supporters of the bill acknowledged that it would be painful for members of Congress who supported it--as well as for constituents who would face higher taxes and cuts in popular programs if the bill became law. But they said that there was no alternative if the nation hopes to curb its enormous deficits and revive the economy.

On the revenue side, the bill would raise taxes by $325 billion between now and 1998, offset by $75 billion worth of tax relief, mainly to business.

The heaviest tax burden would fall on individuals with taxable incomes over $100,000 and couples with taxable incomes over $140,000.

The single-most controversial provision was a broad-based tax on most forms of energy, based on heat content measured in British thermal units, or BTUs. Opponents said it would kill jobs, add to inflation and affect middle-income taxpayers. Its defenders said the tax was a modest levy that would add only $17 a month to the average family’s tax bill when it becomes fully effective in 1998.

Opponents also criticized an increase in taxation of Social Security benefits for individuals with incomes above $25,000 and for couples with incomes of $32,000 and up. This would affect one-quarter of Social Security retirees with the highest incomes. In addition, the package includes a major expansion of the earned income tax credit that is designed to offset the impact of the energy tax on “working poor” families with incomes below $29,000 a year.

The bill also would repeal the luxury tax on boats, airplanes, furs and jewelry, and moderate the tax on luxury cars selling for $30,000 or more.

On the spending side, the bill would lock in a “hard freeze” at current levels on outlays for defense, foreign aid and other federal programs governed by the regular appropriations process. This would produce savings of $102 billion over the next five years, requiring Congress to make hard choices among competing programs.

Spending for mandatory benefits and other direct spending programs would be cut back by $87 billion over the five-year period, including a $50-billion cut in payments to Medicare providers. Savings of $7 billion were attributed to debt management changes and another $50 billion less would be paid for interest payments on the debt because of less borrowing.

Despite optimistic statements early Thursday by Foley and his lieutenants, Democratic leaders carried on their battle for votes all afternoon as zero-hour approached. Tensions rose as intensive one-on-one lobbying made progress but failed to produce a definite majority in the House.

“We are not over the magic number yet,” an aide to the Democratic leadership said as the verbal warfare continued on the floor. “This will be a squeaker.”

The agreement between the House leaders and Stenholm, which drew applause from conservative Democrats, provided some impetus for the President’s plan, with some proponents saying it sealed the victory.

But one Democrat familiar with the search for votes said the leadership was five short in mid-afternoon. Even so, loyalists assured that voting down the massive budget bill was unthinkable.

“We’re within spittin’ distance,” Rep. Jolene Unsoeld (D-Wash.) said as the sun set. “We’re going to make it.”

Republicans, who seemed unanimous against the measure, repeatedly warned that voters would take revenge on Democrats who supported the President.

“If the Democrats hang together and pass this bill, they will certainly hang separately in the next election,” said Rep. Deborah Pryce (R-Ohio).

And House Minority Leader Robert H. Michel (R-Ill.) reminded “Clinton clones” among Democrats that constituents would focus on supporters of the bill. “They will remember who let loose this deadly virus into our economic bloodstream.”

Rep. David Obey (D-Wis.) responded: “This is the only chance any of us will have in our careers to correct this (deficit) problem. . . . Life ends after today if this doesn’t pass.”

The White House mounted an all-out campaign with appeals to party loyalty and not-so-subtle reminders about future favors from the President or the House leadership.

Rep. Charles Rose (D-N.C.), for example, said there were “small side deals” struck with wavering lawmakers. Rose acknowledged that he helped get favors for Southern peanut farmers and tobacco growers, which he estimated swayed 15 to 20 Democratic votes. “I did my shopping early,” he said.

Even with tensions mounting, humor enlivened the debate. Referring to a celebrated $200 trim job, Rep. Jim Bunning (R-Ky.) drew bipartisan laughter when he said: “This bill is like President Clinton’s haircut. It’s a lot more expensive than it looks.”

And Rep. James A. Traficant Jr. (D-Ohio) shouted: “I’m voting no, damn it! It’s about jobs, Congress. The American people are taxed off.”

Senate Minority Leader Bob Dole (R-Kan.), reacting to the House outcome, called on the American people to let their senators know they “want no part of the President’s crippling tax scheme.”

“It’s bad news for the economy, and bad news for the taxpayers, which is why they should be putting senators on the hot seat during the next three weeks,” Dole said in a statement.

Earlier, on CNN, however, Dole said that the bill ultimately would pass in the Senate because of the Democratic margin and the inability of the Republicans to stage a filibuster as they did in the vote on Clinton’s economic stimulus package.

Sen. David L. Boren (D-Okla.), a leading Senate Democratic critic of the President’s package, said: “Much work remains to be done” to improve the budget bill so that it contains more spending cuts than tax increases.

A breakdown of the House vote showed that 52 of the 63 Democratic freshmen voted for the President’s plan, with 11 newcomers voting against it. Seven Texas Democrats opposed Clinton on the key vote, with 31 other Democratic defectors coming from 21 other states.