Senate set for close vote on deficit bill: Defeat of plan to trim the budget despite Democrat majority would deal a body blow to Clinton

THE US Senate was last night heading for a nail-bitingly close vote on President Bill Clinton's economic package in the knowledge that its defeat would be a shattering blow to the presidency.

The deficit-cutting bill went to the Senate following a razor-thin passage through the House of Representatives, which was only secured after hours of frantic telephone calls and horse-trading on Capitol Hill by Mr Clinton and Democratic party leaders.

The legislation is widely seen as a test of Mr Clinton's ability to govern and to exercise command over the Democrats, who have control of Congress and the White House for the first time in 12 years.

As senators yesterday began debating the measures, which are intended to trim the federal budget by dollars 496bn ( pounds 333bn) over five years, the outcome was uncertain. The Democrats have a 56-44 majority in the Senate, but five members had vowed to oppose the bill.

The White House's central fear was that other Democrats - for instance, Bob Kerrey, the maverick ex-presidential candidate from Nebraska - would join the opposition. When an earlier draft went to the Senate in May, it passed only after a tie-breaking vote by Vice-President Al Gore.

Last night it remained possible that Mr Gore would again be called into the fray, although the White House claimed that Mr Kerrey, who had been threatening a revolt, was back on-side after receiving assurances of more government spending cuts later this year.

The package passed through the House by the slimmest possible margin - a 218-216 majority - after some of the most dramatic scenes for years. When the 15 minutes allotted for voting expired, the count was still two votes short after 41 Democrats joined all the Republicans in opposition. House leaders agreed to keep the final tally open while a scrum of Democrats surrounded two undecided members, to derisive chants from Republicans of 'Let's make a deal'.

While the President's fate hung in the balance, the two waverers, Marjorie Margolies-Mezvinsky from Pennsylvania and Pat Williams from Montana, were eventually prevailed upon to cast the 217th and 218th votes, securing victory for the bill. Afterwards, accompanied by a throng of cheering aides, an immensely relieved Mr Clinton appeared in the White House Rose Garden to hail a 'heroic vote', and praise the House for 'breaking gridlock and entering a new era of growth'.

The hair-raisingly close victory was only secured after the administration and House Democratic leaders appeased wavering and election-minded conservatives with promises to introduce measures for more spending cuts in the autumn. For the past few days, Capitol Hill has been bombarded with millions of telephone calls, many of them from suspicious and angry Americans who have yet to be convinced by Mr Clinton's promises that the bill - heavily amended by Congress - will only cost middle-income families a dime (10 cents) a day in extra tax.

The bill includes dollars 254bn in spending cuts, and dollars 242bn in increased tax revenues - an increase condemned by the Republican leader in the Senate, Bob Dole, as the 'largest tax increase in world history'. The Clinton administration, which claims that 80 per cent of the extra tax will fall on those with incomes of more than dollars 200,000, maintains that the only revenue-raising measure that will affect most Americans is a 4.3 cent per gallon levy on petrol.

The spending cuts, criticised by Republicans and some Democrats as inadequate, fall mainly on defence and on Medicare, the government-funded health programme for the elderly.

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