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CLINTON'S LAST PLAN <br> $350 BILLION IN TAX CUTS PROPOSED

President Clinton proposed $343 billion in increased spending and a $350 billion tax cut Thursday night in what might have been his final appearance before a joint session of Congress.

His State of the Union address proposed 33 initiatives, ranging from requiring photo IDs for handgun purchases to building new schools. Most of the initiatives will be sidelined or rewritten by the Republican majorities in the House and Senate.

In proposals that brought heavy applause from the Democratic side of the House chamber, he urged increased welfare payments for the working poor and increasing funds to advance women's pay equity.

As if not to burden his Democratic Party's congressional and presidential candidates, Clinton refrained from offering any expensive new programs. The increases in spending came mainly from growth in existing programs.

Clinton's tax program includes marriage penalty relief, tax deductions of up to $2,800 annually per family for college tuition and fees, and retirement savings accounts for low- and moderate-income families. He also proposed steps to encourage charitable giving.

Republican National Chairman Jim Nicholson called the speech a "a pitch to buy the White House for Al Gore by proposing to spend the money of working familiesfaster than the Bureau of Engraving can print it."

The president's tax package would cost $350 billion over 10 years. His plan envisions cutting that price tag by $100 billion by closing tax havens, shelters and loopholes. Congress has previously rejected many of those ideas on grounds they are tax increases.

Clinton's seventh and last State of the Union message marked a bittersweet moment in his and the nation's life. A year ago, following his impeachment in the House, he was facing trial in the Senate. The day after his last State of the Union address, he and his wife flew to Buffalo for a tumultuous partisan reception.

While Clinton opened his speech claiming "the state of the union is the strongest it has ever been," he highlighted the poignancy of the event by saying at the close: "As long as our dreams outweigh our memories, America will be forever young."

Clinton could still appear before Congress for other reasons, possibly a farewell address before he leaves office on Jan. 20, 2001.

Speaking for 89 minutes, the president broke his 1995 State of the Union record of 81 minutes.

As if to prolong this appearance, the beaming president arrived 15 minutes late for it and took an unusually long time squeezing hands and exchanging high-fives with members of both parties as he worked his way down the center aisle to the rostrum.

Goading the GOP for pigeonholing his older programs, Clinton said:

"I ask you again to pass a real patients' bill of rights. Pass common-sense gun-safety legislation. Pass campaign reform. Vote on long-overdue judicial nominations. And again I ask you to raise the minimum wage."

Democrats, hoping to win their first House majority since 1994, pounced on the president's applause lines.

One of the biggest was his promise that the national debt will be repaid in 13 years. This will make the United States "debt-free for the first time since Andrew Jackson was president in 1835."

He said the tax increases passed by the last Democratic Congress in 1993 have made possible a proposed "bipartisan down payment on Social Security reform."

Republicans ridiculed Clinton's spending plans, recalling that in his 1996 message, he said, "The era of big government is over."

Senate Budget Committee chairman Pete Domenici, R-N.M., said Clinton has proposed $225 billion in new government spending in the past 31 days. Coupled with a $118 billion prescription drug benefit for seniors on Medicare, Domenici said, that adds up to $343 billion in new government spending.

"If President Clinton speaks tonight for 90 minutes, he will be spending almost $4 billion a minute," Domenici said.

Clinton embraced two programs advanced by Rep. John J. LaFalce, D-Town of Tonawanda, and Sen. Charles E. Schumer, D-N.Y. He said Schumer's plan for a middle-class tax deduction for college tuition "will make four years of college affordable for all."

He said LaFalce's New Markets Initiatives legislation will "spur $22 billion in private-sector capital to create new businesses and new investments in inner cities and rural areas."

The president reiterated his 1999 call for inclusion of prescription drug payments under Medicare.

"In good conscience, we cannot let another year pass without extending to all seniors the lifeline of affordable prescription drugs," he said.

Congress should extend Medicare to cover mental illness, and he offered a salute to Vice President Gore's wife, Tipper, for leading the administration's efforts to "break down the barriers to the decent treatment of mental illness."

He also asked Congress to set aside $400 billion of the surplus to keep Medicare solvent past 2025.

Toward the end, Clinton stumbled twice on the word "livable" and drew huge guffaws from Republicans when he twice credited Gore for his work in making communities "more liberal."

For the first time in his presidency, the president's box was occupied by a candidate for the Senate -- his wife, who is expected to seek the seat of retiring Sen. Daniel Patrick Moynihan, D-N.Y.

Her campaign received a boost when he said, "I am especially grateful to the person who has led our efforts from the beginning, and who has worked tirelessly for children and families for 30 years now: my wife, Hillary."

In another plug for his wife, the president asked the entertainment industry to accept "the first lady's challenge -- to develop a single, voluntary ratings system for all children's entertainment, one that is easier for parents to understand and enforce."

Among Hillary Rodham Clinton's guests were Tom Mauser, the father of 15-year-old Daniel Mauser, who was gunned down at Columbine High School.

Mauser, Clinton said, took a leave of absence to work for tougher gun laws.

Clinton's gun proposal would require that anyone who seeks to buy a handgun would first have to obtain a license with photo identification showing he or she had passed a background check and a gun safety course.

The president praised Gore, his running mate in 1992 and 1996 and now a presidential candidate, for his "courage" in "facing down the gun lobby" and casting the deciding Senate vote to require Brady background checks at gun shows, child safety locks, and a ban on importing large-capacity ammunition clips.

Clinton upped the education ante on Republicans, who defeated his plan to invest $6 billion in new and refurbished schools. He called for a $24.8 billion tax credit to modernize 6,000 schools and $1.3 billion in new funding to support 8,300 school renovation projects in high-poverty neighborhoods over the next five years.

In the televised GOP congressional response, two senators said they proposed bigger tax cuts and better approaches to improving health care and education with less expense and red tape.

Sen. Bill Frist of Tennessee, a surgeon, warned expansion of health care could bring about "rationing, lack of choice, long waits and denial of care for seniors." Susan Collins of Maine said Republicans will continue to increase federal funds for elementary and secondary education, but local schools and communities should decide how to spend the money.

News Washington Bureau assistant Michael Davitiashvili contributed to this report.

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