Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: THURSDAY, September 28, 1995 TAG: 9509280051
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: DAVID HESS KNIGHT-RIDDER/TRIBUNE
DATELINE: WASHINGTON LENGTH: Medium
The White House and congressional Republican leaders agreed Wednesday on a six-week truce to keep the government operating while they battle over the budget.
The two sides decided it was safer politically to continue arguing about spending priorities than to risk public denunciation for failing to keep government services moving.
An agreement is necessary because Congress will not be close to passing the 13 annual spending bills for government operations before the new fiscal year begins Sunday.
Under the broad terms of the agreement, President Clinton and the GOP negotiators decided to adopt a stopgap funding measure through Nov. 13 to pay for ongoing federal programs. Spending would be 5 percent to 10 percent below the average of the House and Senate versions of each of the 13 spending bills for 1996.
They also agreed not to abolish or sharply curtail several programs that Republicans want to scrap and the president wants to save, such as funding for community policing.
During the six-week span, Clinton is expected to veto several Republican spending bills - ranging from defense to health and welfare measures - that he says are either too expensive or too hard on the poor and middle class.
``There has been too much irresponsible talk about using the threat of government shutdown or default to force a particular set of priorities on the American people ... This process shows that we can work together,'' White House chief of staff Leon Panetta said in a statement regarding the six-week bill.
House Speaker Newt Gingrich, R-Ga., has acknowledged that some of the GOP's spending cuts in domestic programs might have to be eased in order to reach a compromise and attain a permanent budget for the remainder of the 1996 spending cycle.
``But the bottom line,'' he said, ``is that we're not going to fudge on our promise to the American people to balance the budget in 2002. That's non-negotiable.''
The hard-won agreement, reached after several days of negotiations, is expected to be approved by the House and Senate later this week. But it provides only a temporary respite.
In addition to fighting over the spending bills between now and mid-November, Congress and Clinton are headed for a mid-November showdown on raising the government's debt limit. The government's authority to borrow money is expected to run out then, and without congressional action the government could default on its obligations for the first time in history.
The showdown is expected because Congress may attach a huge bill revamping Medicare, Medicaid, welfare, farm subsidies and other benefit programs to the measure raising the debt ceiling. Such a move could make it more difficult for Clinton to veto the measure.
The two sides are far apart on such issues as tax cuts and proposed GOP slowdowns in Medicare and Medicaid spending.
Some economists, including Federal Reserve chairman Alan Greenspan, have warned that a default could lead to flagging investor confidence in U.S. Treasury paper - and prompt an increase in interest rates for both government and private borrowers.
That, Greenspan said, could defeat the GOP's hope for balancing the budget in seven years because of the higher costs of servicing the national debt. Interest payments on the $4.9 trillion debt now consume about 16 percent of the $1.5 trillion federal budget.
by CNB