President Signs Budget Deal

At a White House ceremony Tuesday, President Clinton signed into law the reconciliation bills passed last week -- calling them a "true milestone for our nation" that will ensure a balanced budget, keep Medicare solvent for 10 years, provide investment in higher education, expand health care for children and give a tax break to families with children.

House Speaker Newt Gingrich, R-Ga., applauded the bipartisanship that made the deal possible, and singled out the bipartisan Medicare commission created by the legislation as an opportunity to extend that bipartisanship into the future. Gingrich pledged to work with the president to appoint the commission and then "enact in 1999 the right savings and the right steps."

But, complaining the tax bill "is loaded with narrowly targeted tax breaks and loopholes," a group of 15 House liberals today urged Clinton to use his new line item veto authority to strike some of what they say are the bill's worst provisions.

"We are writing to urge you in the strongest terms to use your line item veto power to eliminate the most egregious of these special interest tax breaks and giveaways," said the letter, dated Monday and signed by Reps. Peter DeFazio, D-Ore., Ronald Dellums, D- Calif., Louis Stokes, D-Ohio, Pete Stark, D-Calif., and Edward Markey, D-Mass., among others.

Among the 79 tax provisions subject to line item veto, the letter noted that "Amway, a highly successful international sales organization, will receive special tax protection for its two Asian affiliates," that "some county officials in Mississippi will receive tax deductions not available to their counterparts in other states" and that "a Texas insurance company, at least one wealthy farm tycoon and a crowd of other special interests are singled out in this bill."

Rep. Thomas Barrett, D-Wis., sent Clinton a separate letter urging him to veto four tax bill provisions, including one giving producers of hard cider a lower tax burden and one giving tax breaks for the export of computer software that Barrett said could cost $1.7 billion over 10 years.

And House Minority Leader Richard Gephardt, D-Mo., today wrote to Clinton to express his "dismay" over what he called "the most outrageous special interest provision in this budget deal" -- allowing the tobacco industry to use money collected from increased tobacco taxes to partially offset its costs in the $368.5 billion settlement it reached last month with state attorneys general. That provision is not subject to the line item veto, but Gephardt promised Clinton that "there will be efforts to repeal it when Congress reconvenes after Labor Day."

Senate Minority Leader Tom Daschle, D-S.D., will not be sending Clinton any recommendations for a line item veto, according to his office.

White House Press Secretary Michael McCurry said Chief of Staff Bowles and National Economic Council Director Gene Sperling, leading a group of administration officials analyzing provisions for possible line item vetoes, will make recommendations after Wednesday.