Leaders to try again on budget

GOP threatens piecemeal funding
on eve of new round of talks

January 16, 1996
Web posted at: 10:15 p.m. EST

WASHINGTON (CNN) -- Budget talks between the White House and Republican congressional leaders, suspended for a week, were poised to resume Wednesday. House Speaker Newt Gingrich was expected to participate, but remained pessimistic Tuesday about reaching a balanced-budget agreement with President Clinton.

White House spokesman Mike McCurry said an agreement could be close, but only if Republicans are willing to retreat on Medicare. He indicated that the White House bottom line on Medicare savings is $124 billion, and said there was no reason to go lower "unless you want to give big tax cuts to the wealthy."

"We'll just continue to shrink the government by legislative activity."

-- House Speaker Newt Gingrich, R-Georgia
(37K AIFF or WAV sound)

Speaking outside Detroit Tuesday, Gingrich said that in the absence of a deal, Republicans would approve overall spending at only about 75 percent of 1995 levels, using the remaining 25 percent to move toward a balanced budget.

Earlier, at a fund-raiser in Lansing, Michigan, the speaker said he would attend Wednesday's talks, but that if the they fell through, Republicans would fund, piecemeal, only those programs they favor.

"You'll see us pass some very targeted appropriations," he said. "For example, we targeted all the national parks. We targeted the institutes of health, the passport office. We paid 100 percent of those institutions."

McCurry described Gingrich's suggestion as "really, really dangerous." "If they want to repeal fundamental protections for workers in this country, they ought to be honest about it and they ought not to do it back-door through appropriations," he said.

Some Republicans said there were limits to their new targeted-spending strategy. "If we were to carry that to too great an extreme, the fact is it would be unlikely the Senate would be able to pass it or the president would sign the bill," said Rep. Bob Livingston, R-Louisiana. "We have got to meet the president and the Senate halfway."

The strategy would likely interrupt funding for programs that tend to be unpopular among conservatives, including the Environmental Protection Agency, the Occupational Safety and Health Administration, the Labor and Commerce departments and various agencies that fund the arts and humanities.

Six of the 13 annual appropriations bills have not yet been signed into law. While sources in both camps said they are confident of pushing through three of the bills, they said huge differences remain on the other three.

Moderates: Don't give up on deal

A group of bipartisan Senate moderates Tuesday urged negotiators not to give up, saying "the future of the country is at stake."

The 20 senators -- 10 Democrats, 10 Republicans -- will be sending a letter to the Republican and Democratic congressional leadership and to Clinton to "come up with an agreement" and "not to walk away from it."

One of them, Sen. John Chafee, R-Rhode Island, said it would be a mistake to let the opportunity for an accord slip away. "We think that the tough decisions aren't going to be made in elections," he said.

But House Budget Chairman John Kasich, R-Ohio, characterized the White House and the GOP as "being universes apart" on a balanced budget.

Democrats to hold own talks

Meanwhile, Democratic lawmakers have scheduled three days of hearings beginning Wednesday to examine the impact of Republican and Democratic budget proposals. The hearings will examine Medicare, Medicaid, the environment and education, and the effect of GOP proposed tax breaks for the wealthy.

The immediate consequence of a collapse in talks would be the possibility of another partial government shutdown when the current temporary funding measure expires January 26. But beyond that, the government is at risk of defaulting on its debts if Congress does not raise the $4.9 trillion debt ceiling soon to enable the Treasury to make interest payments in February.

Kasich suggested over the weekend that Republicans would allow the debt ceiling to rise because of the dire consequences of the nation defaulting on its debts.

But some Republicans, like Sen. Jim Inhofe, R-Oklahoma, are opposing "extending the authority to borrow" until a budget deal is reached.

Related sites:

Feedback

Send us your comments - Selected responses are posted daily.

| CONTENTS | SEARCH | CNN HOME PAGE | MAIN US NEWS PAGE |

The Associated Press contributed to this report.