LANDMARK BUDGET BILL : House Vs. Senate

The House passed one version of a gigantic tax and spending bill designed to balance the budget by the year 2002. The Senate is expected to pass a somewhat different version today. Here are the major provisions of the two bills, whose differences will have to be reconciled by a House-Senate conference committee.

HOUSE VERSION

Tax cuts: $245 billion over seven years (the bill passed Thursday does not make clear how a $353-billion tax cut passed earlier by the House would be pared to $245 billion).

$500 per child tax credit available in full for families with incomes up to $200,000.

Top effective capital gains tax rate cut from 28% to 19.8%; future capital gains indexed to inflation.

Spouses with no income eligible for full $2,000 IRA

Estate tax exclusion raised from $600,000 to $750,000.

SENATE VERSION

Tax cuts: $245 billion over seven years

$500 per child tax credit available in full for families with incomes up to $110,000.

Top effective capital gains tax rate cut from 28% to 19.8%; no indexing.

Same, plus income ceilings for IRA eligibility lifted and early withdrawal permitted for mortgages, college, unemployment and major medical expenses.

First $1.5 million of family-owned businesses exempted.

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HOUSE VERSION

Tax Increases: $50 billion over seven years.

Earned income tax credit for low-income workers; workers without children no longer eligible.

Several corporate tax subsidies killed.

SENATE VERSION

Tax Increases: $70 billion over seven years.

Earned income tax credit for low-income workers reduced more sharply.

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HOUSE VERSION

Medicare: $270 billion in reductions from projected growth over seven years.

Annual growth of reimbursements to doctors and hospitals reduced.

Premiums for doctor bill insurance raised.

Doctors and hospitals encouraged by regulatory changes to form HMOs and other managed care networks for elderly.

SENATE VERSION

Medicare: $270 billion in reductions from projected growth over seven years

Annual growth of reimbursements to doctors and hospitals reduced.

Premiums and deductibles for doctor bill insurance raised.

Doctors and hospitals encouraged by regulatory changes to form HMOs and other managed care networks.

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HOUSE VERSION

Medicaid: Converted to a block grant to states, with poor people losing their entitlement to medical care.

SENATE VERSION

Medicaid: Converted to a block grant to states, with poor people losing their entitlement to medical care.

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HOUSE VERSION

AFDC: Converted to a block grant to states, with poor people with children losing their guarantee of cash aid.

SENATE VERSION

AFDC: Converted to a block grant to states, with poor people with children losing their guarantee of cash aid.

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HOUSE VERSION

Farms: Farm subsidies replaced with direct, and declining, payments to farmers.

SENATE VERSION

Farms: Existing programs kept with reduced subsidies.

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HOUSE VERSION

Student loans: New program of direct government loans abolished.

SENATE VERSION

Student loans: New payment to government of 0.85% of loan amount required.

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HOUSE VERSION

Bureaucracy: Commerce Department abolished.

SENATE VERSION

Bureaucracy: Commerce Department scaled back.

NEXT STEPS

Today: Senate likely to pass its version.

Next week: House-Senate conference committee compromises away the differences between the two versions.

Early November: House and Senate approve compromise version.

Soon thereafter: President Clinton has promised to veto budget bill.

Before end of year: Congress reworks budget bill into a version Clinton can sign.

Source: Times Washington Bureau