Congress focuses on deficit reduction plan

Abstract

As Congress returned last week from its Fourth of July recess, the first order of business was reconciling House and Senate versions of President Bill Clinton's five-year, $500 billion deficit reduction plan. Both bills, over five years, would raise about $250 billion in new revenues for the federal government, while cutting back mandatory federal spending by some $90 million. The rest of the reduction, $160 billion, is to come from cuts made during the annual appropriation process. The devil is in the details. The biggest sticking point is a new energy tax. Clinton proposed a broad-based energy tax to be phased in over three years, indexed to the heat content (measured in British thermal units) of fuels—a Btu tax. The House basically accepted that plan, but phased it in over five years. The tax would raise about $71.5 billion. Petrochemical feedstocks were exempted from the tax, but since the chemical industry is energy-intensive, it's estimated ...