consumers when it put together the Budget tabled in the House of Assembly on Monday.

A ten percent increase in visitor spending was part of the equation used by Finance Minister the Hon. David Saul.

The Minister was also counting on continued low inflation and greater job security in the US.

Dr. Saul's projections were realistic ones, though a balanced budget constitutional amendment now being debated in the United States was a cause for some concern, a Finance Ministry official said yesterday.

"The only way the US is going to achieve a balanced budget is by a thumping great increase in taxation, or a thumping great decrease in programmes,'' the official told The Royal Gazette . "If you do that, you're going to put the US back into a mild recession.

"Would that have an effect on Bermuda?'' he asked. "Yes, to a certain extent it would.'' But the official saw a balanced budget as more of a long-term objective that would not be achieved quickly.

Senate hearings have begun in Washington on a constitutional amendment that would require a balanced budget.

Supporters said yesterday the change would end the "governmental abuse'' of sky-high deficits.

But Clinton administration officials warned that a balanced budget amendment could batter taxpayers, trim Social Security benefits and slash state anti-crime aid and other federal programmes.

Senate floor debate on the amendment is scheduled for later this month, and a vote is considered too close to call. Like all constitutional amendments, the balanced budget proposal would require two-thirds majorities in the Senate and House before it could be sent to the states for ratification. Three-quarters of the states would have to approve it before it would take effect.

Should the Senate approve the measure, House passage would be expected. The proposal would require a balanced budget but leave decisions on how to do it for later.

In Bermuda, the Finance Ministry official said more immediate concerns were the too rapid tightening of US interest rates or any dramatic increases in taxation or health care costs.

Anything that undermined American job security would also hurt consumer confidence, he said.

But at present, "I don't see that there is anything to stop the local improvement,'' the official said.

The projected ten percent increase in visitor spending was considered realistic, because there had been a 17.5 percent jump in visitor spending in the third quarter of 1993, he said.

The Minister of Tourism had predicted a ten percent jump in visitor arrival figures this year, the official said. But that projection did not form part of the Budget.

The Hon. David Saul.