Clinton Suffers His First Big Loss

FOR A WHILE IT SOUNDED LIKE A REVERSE AUCTION IN billions: 16, 13, 8, 6 . . . In reality, though, all the compromise figures bruited around were hollow. The 43 Republican Senators were adamant, and the Democrats did not have the votes to break their filibuster. After repeated failures they gave up and accepted a simple $4 billion extension of unemployment benefits -- a shrunken remnant of the President's $16 billion economic-stimulus package. It was Clinton's first significant loss in Congress, and it demonstrated that to get his programs passed, he must either win over some Republicans or raise enough public clamor to intimidate them. But he could not sell the public on adding $16 billion in new spending to a budget deficit his Administration pledges to reduce, even for what the White House called a jobs bill.

The deficit is dropping already because of economic growth, reduced military spending and lower interest rates. At the end of fiscal 1993 on Sept. 30, it might total less than $300 billion, vs. an initial forecast of $322 billion. Still, the need to cut more is endangering Clinton's plan for a $21 billion investment tax credit. Dan Rostenkowski, Congress's reigning strongman on taxes, openly advised the White House to drop it. Press secretary Dee Dee Myers responded, in effect: Maybe.