A key member of the Senate's tax-writing committee will propose substituting a rise in the federal gasoline tax for President Clinton's broad energy tax, an aide for the senator said.
Sen. John Breaux, D-La., trying to forge a compromise between the administration and staunch opponents of Mr. Clinton's tax plan, is still working out details, but believes that a moderate rise in the gasoline tax could win votes in the Senate.His proposal would remove nearly all elements of Clinton's tax, which opponents say will harm the economy and cost jobs.
Senate sources said Sen. Breaux's idea was rapidly gaining acceptance, both in the Senate and in the White House.
Sen. Breaux initially wanted to introduce his proposal this week, but postponed it until after Thursday's House vote on a modified version of Mr. Clinton's tax bill.
A spokeswoman for the senator gave no details, but said immediate implementation of an 8-cent rise in the gasoline tax, now at 14.5 cents a gallon, would raise $40 billion over five years.
President Clinton's proposed tax on nearly all forms of energy would raise $70.5 billion over five years, with the cost of gasoline expected to rise 8 cents a gallon in the final two years, according to White House estimates.
Sen. Breaux's proposal would generate the additional $30 billion via spending cuts, the spokeswoman said.
Senior administration sources declined to comment on whether the president would accept the substitution of a gasoline tax in lieu of his broader energy tax.
Mr. Clinton's proposed tax on the heat content of fuels as measured in British thermal units would have slapped a 25.7-cent a million Btus levy on nearly all fuels, plus an additional 34.2 cents a million Btus on petroleum products.
But strong opposition by two key Democratic senators has jeopardized the tax and makes a compromise inevitable.
The two senators leading the charge against Clinton's tax, David Boren of Oklahoma and Bennett Johnston of Louisiana, have proposed eliminating the tax altogether and substituting only cuts in spending for the elderly and the poor.