The Economy Democratic Senators on the Finance Committee agreed on tax increases and spending cuts, pushing deficit-reduction legislation one step closer to becoming law.

The Democratic senators on the Finance Committee agreed today on a set of new tax increases and spending cuts, pushing deficit-reduction legislation one step closer to becoming law.

Most elements of the deficit-reduction legislation passed by the House in May and the Senate last month are identical, or so similar, that the conferees should easily find common ground.

Mr. Clinton's deficit-reduction legislation in 1993 raised the percentage of Social Security benefits subject to taxation to 85 percent when that plus other income totaled more than $44,000.

Last month, Congress used the deficit-reduction legislation to overhaul the system again.

The deficit-reduction legislation that Congress approved and Mr. Clinton signed last year specifies that spending on discretionary programs will remain steady at $540 billion to $550 billion a year through the fiscal year 1998.

Little Leeway for Passage The fundamental situation facing the negotiators was this: every Republican in Congress is opposed to the deficit-reduction legislation.

In 1993, as part of President Clinton's deficit-reduction legislation, Congress took steps that extended the life of the trust fund for three years, from 1999 to 2002.

Over the opposition of every Republican, Congress did vote in its deficit-reduction legislation to raise taxes by nearly $250 billion over five years.

Budget conferees are expected to approve a compromise on deficit-reduction legislation today.