THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Friday, May 26, 1995                   TAG: 9505260722
SECTION: FRONT                    PAGE: A2   EDITION: FINAL 
SOURCE: KNIGHT-RIDDER NEWS SERVICE 
DATELINE: WASHINGTON                         LENGTH: Medium:   58 lines

SENATE PLAN CARVES DEFICIT UNDER THE BILL, APPROVED 57-42, THE BUDGET WOULD BE BALANCED BY 2002 - IN 7 YEARS.

Republican lawmakers took another big step Thursday toward reducing the size and power of the federal government as the Senate approved a GOP budget plan that promises to end deficit spending in seven years.

With the 57-42 vote, the Senate joined the House in pledging to balance the budget by 2002, largely by restraining the growth of health care spending for the elderly and poor, and cutting or eliminating scores of government programs.

``We can talk all we want about who this budget helps or hurts,'' said Senate Budget Committee Chairman Pete V. Domenici, R-N.M. ``But if we don't balance the budget and end these ruinous deficits, our children will be paying $151,000 from their incomes when they grow up just to pay the interest on these awful debts.''

The next step will be for House and Senate negotiators to take their different budget plans and agree on one version that Congress can use as a guide for crafting bills that cut individual programs.

Negotiators will face one big hurdle: whether to include tax cuts in the plan, since the House budget provides about $350 billion in tax reductions over seven years while the Senate budget does not include any tax cuts.

Lawmakers said one potential compromise would be a tax-cut package about half the size of the House measure, with scaled-back tax breaks for investors, families with children and Social Security recipients as possible elements.

After that, the budget and tax bills could run into possible vetoes from President Clinton - who has strongly objected to the GOP priorities.

``This budget will be altered or it will not become law,'' predicted Senate Democratic Leader Tom Daschle of South Dakota. He called the Senate plan ``fundamentally flawed'' because it demands ``deep sacrifices from ordinary people. The haves will have more and the rest will have less.''

Before the final vote, the Senate left the door open to accepting - eventually - a $170 billion tax cut that would benefit families and stimulate the economy - but only if spending reductions are fixed in place first.

In the House, where Speaker Newt Gingrich, R-Ga., has called the GOP's tax cut the ``crown jewel'' of its plan, Republican conservatives promised a strong fight to save it. ILLUSTRATION: Graphic

HOW THEY VOTED

A ``yes'' vote is a vote to approve the plan.

John W. Warner, R-Va.Yes

Charles S. Robb, D-Va.Yes

Jesse A. Helms, R-N.C.Yes

Lauch Faircloth, R-N.C.Yes

by CNB