Fiscal '96 Budget Pact Completed

WASHINGTON (CNN, April 25) -- After seven months of contentious negotiations, two partial government shutdowns, and extensive election-year maneuvering, White House and congressional negotiators said Wednesday they finally have a spending deal that will fly.

Negotiators unveiled a $160 billion measure to pay for unfunded government agencies through September, the end of this fiscal year. They are the same agencies that have been run all year off money granted in a series of stopgap spending bills, and the same agencies for which another continuing resolution was passed, 400-14, in the House Wednesday. The Senate passed that resolution by voice vote and handed it over to President Clinton who signed it late Wednesday night.

The budget agreement ends the need for such stopgap measures, at least for 1996, and it is expected to be pushed through Congress today. White House press secretary Mike McCurry said President Clinton will sign the legislation as soon as it crosses his desk. "The administration is satisfied that the president's priorities have been addressed as well as they can be addressed," he said.

Despite a savings of about $23 billion over last year, the measure is likely to alienate some conservatives, unhappy that its spending cuts are not deep enough, and some liberals, upset that programs are slashed too steeply. "It's bad for the American public and we shouldn't go along to get along," said freshman Republican Rep. David McIntosh (R-Ind.).

But House Speaker Newt Gingrich, lately on the defensive, called it "a great achievement." Republicans, he said, "were able to save a tremendous amount of money for the American people."

It's not the seven-years-to-balance agreement that both sides sought earlier this year and last fall. Gingrich called it a "significant step toward a balanced budget," but Rep. John Kasich (R-Ohio), who heads the House budget committee, was less sanguine. The White House, he said, is "not ready for real talks." "Until the president trusts my neighbor as much as the Republicans do, he is not ready to balance the budget and return power back to the states."

Policy trade-offs

The sticking points were not over money, but policy.

Environmental issues were among the most contentious. A dispute over how much logging would be allowed in Alaska's Tongass National Forest was settled by granting the president the power to cut established logging levels. The plan also provides $100 million in aid over four years for timber employees who might lose work as a result.

Also left in the measure: a reduction in funds for protecting the Mojave Desert in California, a provision for more mining in the Mojave and a GOP-backed moratorium on the Endangered Species Act. However, Clinton will have power to waive those parts of the agreement.

Both sides split the difference over Clinton's "Cops on the Beat" program. At $1.4 billion, the program will not be paid for in block grants, as Republicans had wished.

The final package also includes:

$860 million for operations in Bosnia
$1.3 billion for domestic disaster assistance
$70 million to transfer F-16 fighter jets to Jordan
$50 million for anti-terrorism support in Israel

Two hundred federal programs were eliminated.

Democrats said they were extremely pleased by restored funding for education and job training programs. White House Chief of Staff Leon Panetta said almost $5 billion was restored for priorities that had been opposed by Republicans, including money the House took away from education, environmental protection, job training, Clinton's national service initiative and other programs.

The biggest source for additional funding came from cuts in the Federal Emergency Management Agency (FEMA). Congressional negotiators decided to take $1 billion out of the FEMA fund. A Republican source told CNN that negotiators decided the agency could get by on less money than in years past because there have been fewer disasters this year.

Congress gets cracking on '97 budget

Now that fiscal 1996 is almost over, Congress is supposed to finish the next budget in time for fiscal year 1997, which begins October 1. House and Senate budget committees are hopeful they can mark up the 1997 version of the budget next week.

Like the president's budget, the drafts the Republicans are contemplating would balance the budget by 2002. To accomplish that, Republicans would have to reduce the deficit by $525 billion over the next six years, mostly from entitlements.

They could get $268 billion in savings from Medicare, as much as $85 billion from Medicaid cuts, and $52 billion from welfare reform. Republicans will probably still seek $137 billion in tax cuts, keep defense spending roughly level, and continue their effort to "downsize" the government.

Although the budget is due in four months -- theoretically, ample time to write up and pass a budget proposal -- the due date is only a month before presidential elections. It was rough going up to this point, and there's no telling what else might happen this fall.

Fiscal '96 Budget Pact Completed

Policy trade-offs

Congress gets cracking on '97 budget

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