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Clinton, GOP Leaders See Budget Talks Bearing Fruit

Congress: Both sides lay groundwork for settling differences over spending and taxes. Meanwhile, House and Senate back bills to keep government afloat.


WASHINGTON — Taking the first wary step toward a budget compromise, President Clinton and Republican congressional leaders met Tuesday and emerged with fresh optimism that they could get beyond partisan rancor and settle their differences in the coming week.

The two sides laid the groundwork for making more concrete progress toward reconciling their clashing views on spending, taxes and other budget issues.

Clinton acknowledged that his controversial proposal to finance increased domestic spending by raising cigarette taxes by 55 cents a pack is doomed in the Republican-controlled Congress, but Democrats stopped short of forswearing any tax hike, as GOP leaders would like.

The meeting, which included Clinton and five Democratic and Republican congressional leaders, ended with both sides promising to "roll up their sleeves" to try to resolve the budget conflicts that have kept the government from having a complete budget three weeks into the fiscal year.

Before the talks began, the House and Senate bought time by voting to extend the temporary spending bill that has kept the government afloat since the new fiscal year began.

That extension, approved 421 to 2 by the House and by voice vote in the Senate, would set an Oct. 29 deadline for resolving the budget impasse. Clinton is expected to sign it.

Despite those glimmerings of bipartisanship, both sides headed into the White House budget meeting with partisan guns blazing. Earlier in the day, House Republicans forced a vote on, and soundly defeated, a $19.2-billion package of tax increases that Clinton had proposed to offset the cost of his domestic spending initiatives, including his cigarette tax hike.

"The idea is to get this question settled once and for all so there is no one who believes we will raise taxes," said House Majority Leader Dick Armey (R-Texas).

Joining in a unanimous 419-0 vote against the bill, Democrats accused Republicans of trying to embarrass the president and put his party on the spot at a time that they are supposed to be seeking common ground.

In the budget meeting at the White House, Clinton himself waved a white flag on the tobacco tax. "The president said he understood the resistance to a 55-cent tax," said White House Chief of Staff John Podesta.

Republicans said that Clinton seemed to be taking all tax increases off the table. But Senate Minority Leader Tom Daschle (D-S.D.) said that the cigarette tax issue is still alive. "I think the president acknowledged that maybe 55 cents the Republicans may not be able to accept," he said, "but there's a long way from 1 cent to 55 cents."

Participants in the meeting said that smaller groups of negotiators from the White House and Congress would meet in the coming week to iron out specific disputes with the aim of completing action by next Tuesday--the deadline for Clinton to decide whether to sign or veto some of the spending bills Congress has passed.

While the White House meeting may have produced little substantive agreement, it gave both sides a chance to lay out their opening gambits in negotiations that will come to a head over the next week.

For Clinton, the bottom line is getting the money and policies he wants for education, the environment and law enforcement.

For Republicans, the bottom line is no new taxes. They insisted that, if Clinton wants more money than GOP bills provided for particular programs, he must find offsetting cuts in other areas of spending.

Both sides agreed to one overarching aim: to avoid dipping into the Social Security surplus to pay for other programs.

Although the government has done that for years, both Clinton and Republican leaders have promised to end that practice. Based on current surplus projections, that amounts to imposing a $592-billion cap on discretionary spending in the 2000 budget.

"Their goal is not to spend Social Security," Podesta said. "We share that. We're willing to sit down in good faith and see where all these pieces add up."

The two sides seemed to remain at odds, however, on a key question about how to proceed.

Republicans hope to negotiate narrowly on each of the 13 appropriation bills needed to finance the government. Clinton and the Democrats want those decisions to be made in a broader context that considers restoring Medicare subsidies for nursing home and home health care agencies and legislation to extend some tax breaks that are about to expire.

Congress and Clinton are operating in fiscal overtime because the fiscal year began Oct. 1. Clinton has signed five of the 13 appropriation bills needed to keep the government running, and he is expected to sign two more in coming days. He has threatened to veto four more. Oct. 29 is Congress' target date for adjourning for the year, but the fiscal problem is big enough that many observers believe that Congress will have to extend the budget deadline at least one more time.

Tuesday's House debate on taxes was a reminder of how deep the partisan divide is.

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