GOP PUSHES Bush budget through House

Wednesday, May 9th 2001, 12:00 am

By: News On 6

WASHINGTON (AP) _ Republicans pushed a 2002 budget through the House on Wednesday, a first stride toward enactment of the big tax cuts and spending restraint favored by President Bush.

The $1.95 trillion measure was approved by a near party-line 221-207 vote that underlined the GOP's desire to deliver a crucial victory to the president just four months into his term.

Passage in the evenly divided Senate also seemed assured as White House officials and Senate Republicans said they would get a crucial handful of votes from Senate Democratic moderates. That vote seems likely Thursday.

The budget calls for a $1.35 trillion, 11-year tax cut and 4 percent growth _ half of this year's increase _ for many federal programs. Bush had long sought a 10-year, $1.6 trillion tax reduction, but accepted the smaller package as the price for ensuring support from moderate Senate Democrats.

``Let's recognize where those tax dollars come from,'' said Rep. Jim Nussle, R-Iowa, who chairs the House Budget Committee. ``And let's take the opportunity to provide tax relief for the American people.''

Details of the tax cut and spending will be worked out in subsequent bills.

But Democrats said the tax cut is far too large and too weighted toward the rich, while sopping up funds needed for schools, creating new prescription drug subsidies, and other domestic needs.

``This budget is a farce and it's a fraud,'' said House Minority Leader Dick Gephardt, D-Mo. ``And at the end, America deserves better than that.''

Despite overwhelming Democratic opposition, it was a cluster of centrist Democrats who were poised to supply the pivotal votes needed for passage in the Senate.

``I think that's correct,'' Sen. John Breaux, D-La., a leader of those moderates, said of GOP predictions of moderate Democratic support.

The Democratic votes were needed because a pair of maverick Republicans _ Sens. James Jeffords of Vermont and Lincoln Chafee of Rhode Island _ were balking at supporting the budget because they said the tax cut was too large and its education funds too small.

Breaux's group includes 14 Democrats who voted for an earlier Senate version of the budget that had a slightly smaller tax cut. One other Democrat _ Sen. Zell Miller of Georgia _ has already said he will vote for the GOP fiscal plan.

Any Republican strategy that successfully splits the Senate moderates would underline the fragility of the centrists' coalition and decrease their clout, while increasing the power of both Bush and Senate GOP leaders.

The budget calls for reducing the publicly held national debt by $2.4 trillion over the coming decade _ the most that Republicans say is feasible. Democrats say the GOP is skimping on debt reduction to reserve money for their tax cut.

In addition, the budget would set aside extra money for defense, schools, farmers, health insurance for the poor and prescription drug coverage.

Overall, it would allow 4 percent more money than this year for all federal programs except automatically paid benefits like Social Security. That one-third of the budget would grow from $635 billion this year to $661 billion next year _ the same amount Bush requested.

But because the military, education and other programs would get relatively large increases, other programs within this category of spending were likely to get small boosts or be cut. The budget contained little information about which programs those would be, and decisions on that will be made in later bills.

Democrats _ and in private some Republicans _ say lawmakers will likely pass spending bills that will exceed the 4 percent boost. Besides annual efforts by legislators to win money for favorite programs, the figure ignores a request for a big Pentagon increase that is likely to be sought by Defense Secretary Donald H. Rumsfeld.

The budget sets tax and spending guidelines that lawmakers are supposed to follow _ but often ignore _ when writing later bills that finance federal programs and change tax law. It does not need the president's signature.

But under congressional rules, budget passage would ensure that the tax cut the measure envisions could not be killed by a Senate filibuster _ delays that would require 60 votes to end. The budget vote is also an important signal of where congressional sentiment lies on a president's fiscal proposals.

If the Senate completes action on the budget Thursday, that would be nine days after Republicans, Bush and centrist Democrats announced they had reached an agreement, with days of further negotiations needed to complete the last details.

A House vote last week was postponed after aides realized two pages of the two-inch thick measure had been omitted.

Republicans said they nailed down the moderate Democratic support they needed by agreeing that the Senate's forthcoming tax bill would limit a $100 billion portion of the tax cut aimed at stimulating the economy to 2001 and 2002.

The House tax bill could spread the money over the next 11 years. House-Senate bargainers would have to find a compromise later.

In addition, they answered Democrats' insistence for an extra $6 billion for schools by crafting nonbinding language saying that providing additional money for education would be a high priority.