tax blow by the Clinton Administration -- so far.

Congressional sources say the Administration's tax plans do not include increasing taxes on business conducted by offshore insurance companies.

This afternoon the House of Representatives' Ways and Means Committee begins work on a tax bill to implement the President's economic plan.

Committee spokesmen in Washington last night said it did not contain any increases in the Federal Excise Tax (FET) on insurance premiums ceded to offshore domiciles.

Local businessmen and the Bermuda Government have been hoping the new President would pass over an FET increase because it would significantly undermine the Island's attractiveness as an offshore centre.

Only last year, a proposal to increase the FET to four percent from one was put before Congress. Although the measure failed to pass, it has remained in the wings as a valid revenue raiser for the US Government.

President Clinton has laid out an economic plan that seeks to cut the crushing US deficit by $500 billion over the next five years.

To do so, he proposes to raise $337 billion in new taxes while giving $95 billion in tax breaks. The plan includes consumer and corporate tax increases.

The Ways and Means Committee is scheduled to finish work on the President's plan this week and then present it to the House of Representatives as a tax bill.

Committee spokesman Mr. Jim Jaffe said the committee has the power to drop tax measures in the plan as long as they're matched by corresponding increases.

He said that created the possibility that an FET increase, such as the one put forward last year by committee chairman Rep. Dan Rostenkowski, could re-emerge. "But right now it's irrelevent to this debate,'' Mr. he said.

Bermuda's offshore insurance sector has more than 1,300 registered companies which account for most of the $450 million of foreign currency earned annually by the Island's international businesses.