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SENATE BURIES BUSH PLAN TO EARMARK TAXES

The Senate Friday buried President Bush's plan allowing Americans to earmark 10 percent of their tax payments for deficit reduction after opponents described it as a meat-ax gimmick that could shut down the government.

By a 58-36 vote, the Senate rejected the proposal, advanced by Bush at the Republican convention last month, on the technical ground that it had not been considered by the Senate Budget Committee. Senators did not vote on the plan itself."This is the magic potion that will destroy the federal government" by requiring a new series of virtually across-the-board spending cuts every year, said Sen. Robert C. Byrd. D-W.Va. He called the plan an "Erector set solution" and "another brain-dead easy fix that eviscerates our future."

The chief sponsor, Sen. Bob Smith, R-N.H., called the idea basic democracy. "Let the people decide. If it doesn't work . . . we haven't lost a thing," he said.

If all taxpayers accept Bush's challenge, Smith said, the $333 billion deficit would be eliminated and the budget balanced within five years.

Under the proposal, taxpayers could check a box on their returns to designate up to 10 percent of their tax payments for debt reduction. For each dollar earmarked, Congress and the president would have to agree on a dollar of spending reduction.

The spending cuts would touch every area of the budget except Social Security, interest on the debt and money designated for bailing out savers in failed savings and loan institutions.