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January 3, 1996
Web posted at: 1:00 p.m. EST
WASHINGTON (CNN) -- As budget negotiations that have tied up government funds appeared to be making some headway, a ruling Wednesday from a federal judge allowed government agencies to continue requiring that hundreds of thousands of federal employees work without pay during the budget impasse.
The decision by U.S. District Judge Emmet Sullivan came on a challenge brought by two unions representing federal government employees.
"These are not folks who make $125,000 a year and travel at taxpayers expense to exotic places in the world," charged John Sturdivant, president of the American Federation of Government employees. "If the members of Congress had missed a paycheck and weren't worrying about paying their heating bills, this never would have happened."
But Sullivan said a ruling that the so-called "essential" employees could not be made to work without pay would "create a crisis" in the government.
After a late night of budget negotiations Tuesday, congressional leaders are resuming budget talks with President Clinton at 1:30 p.m. EST on Wednesday, the 19th day of the partial U.S. government shutdown.
A White House official told CNN Wednesday that Clinton now is willing to consider a moderate cut in the capital gains tax as part of a budget compromise. CNN's source said Clinton mentioned the possibility in a phone discussion with Sen. Trent Lott, R-Mississippi. The Republican budget plan proposes a $36 billion capital gains tax cut over seven years and a $77 billion cut over 10 years.
Previously, the White House had insisted that it would not agree to any further reduction in the capital gains tax. A senior White House budget aide said Clinton believed the reduction in the capital gains tax for small businesses included in the budget two years ago was sufficient.
In a joint statement after Tuesday's three-hour White House session, the two sides said they made "constructive progress." But as the 104th Congress began its second session Wednesday, there appeared to be no hope for House approval of a bill passed in the Senate on Tuesday that would immediately return 260,000 idled federal employees to work through January 12 and pay them. A spokesman for House Speaker Newt Gingrich said the Senate measure "has no chance in the House." House Republicans want any end to the shutdown to be tied to a seven-year balanced budget agreement.
Rep. John Boehner of Ohio, chairman of the House Republican Conference, said the House will not consider the bill Wednesday without a budget agreement.
Senate Majority Leader Bob Dole, front-runner for the Republican presidential nomination, supported the measure. "People have been gone from their jobs long enough," he said. "Enough is enough." But he conceded House Republicans did not agree with him. "They feel this (shutdown) is helpful in bringing about a balanced budget," he said. "That's not my view."
The bill also would provide paychecks for the civil servants ordered to report to work without pay because their agencies' budgets remain unapproved.
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