Clinton rejoins fight in Congress over the budget


WASHINGTON -- President Clinton, trying to elbow his way back into a budget battle dominated by congressional Republicans, last night unveiled his second spending plan of the year and pledged to put the nation on the road to a balanced budget in 10 years.

"It won't be easy," the president said in a televised, five-minute Oval Office address. "My plan cuts spending by $1.1 trillion. It does not raise taxes."

Mr. Clinton offered few specifics, but White House officials outlined a plan to slow the growth of welfare and Medicare spending -- though less than the Republicans would. The president also proposed a smaller tax cut than House Republicans have passed, while accepting the House plans to reduce corporate subsidies.

Republicans, who are on the way to enacting a spending plan to balance the budget in seven years, welcomed the president's entry into the budget discussions. But they expressed skepticism that Mr. Clinton's budget really does turn away from the "big government" solutions that helped run up the federal debt to $4.8 trillion in the first place.

"This is a moment we must seize or forever bear the judgment of history," said Senate Majority Leader Bob Dole, a presidential aspirant, who gave the televised Republican response. But he added: "I was concerned to still hear a defense of the status quo, recycled reasons why big government cannot become smaller, why programs cannot be cut and why agencies cannot be eliminated."

Earlier, White House Chief of Staff Leon E. Panetta urged Democrats and Republicans on Capitol Hill to withhold their judgments until they had seen the plan, but that proved difficult for both sides.

A frustrated Democratic Rep. David R. Obey of Wisconsin, responding to the unexpected shift in tactics by the White House, issued a statement: "I think most of us learned some time ago that if you don't like the president's position on a particular issue, you simply need to wait a few weeks."

Republicans, noting that the administration has been ambivalent even hostile -- to the idea of a balanced budget and that the Senate and House have already passed budget resolutions, insisted that Mr. Clinton had entered the debate too late.

"He's just seen a fast-moving train leaving town, and he's managed to catch up fast enough to catch the caboose," said House Majority Leader Dick Armey of Texas.

Some prominent Democrats, believing that the real-life details of the Republican budget-balancing plans were eroding support for the GOP, had argued that Mr. Clinton should hold off even longer on proposing his own plan.

"The real losers will be the elderly and the families that support them," said House Democratic Leader Richard Gephardt of Missouri, one of those who urged the president not to offer a "counter-budget."

But the president's advisers said Mr. Clinton thought he needed a balanced-budget plan to maintain credibility on the issue with the American people. And in his speech, the president, without naming Mr. Gephardt, indicated he found such partisan reasoning distasteful.

"There are those who have suggested it might actually benefit one side or the other politically if we had gridlock and ended the fiscal year without a budget," he said. "That would be bad for our country."

Despite the flowery rhetoric, snippy criticism and behind-the-scenes maneuvering, it appeared that Mr. Clinton had not really changed positions all that much, aside from conceding what 80 percent to 90 percent of the public already believe -- that a balanced budget is a good idea.

Senior White House aides pronounced the new administration budget a "bold" and "serious" move. But as it turns out, this second Clinton budget closely resembles the first.

* The first administration budget, submitted in February, had a deficit for the coming fiscal year of $200 billion. It was rejected by the Senate, 99-0, and wasn't even brought up for a vote in the House. Yet Mr. Clinton's new budget proposes a deficit for the coming year of $190 billion.

* The new budget contains tax cuts aimed at working-class families with children under age 13 or use of retirement funds for education. Mr. Clinton proposed precisely the same tax cuts in December. They were rejected by both houses of Congress. The House passed more sweeping tax cuts, including a broad reduction in capital gains taxes. The Senate passed no tax cuts, preferring toaim at deficit reduction.

* The new Clinton budget assumes savings in Medicare and Medicaid of $100 billion over the next 10 years, but does so while counting on a series of legislative changes contained in last year's health care bill sponsored by the administration -- but rejected by Congress.

The few aspects of the president's budget that are new, at least for him, are already contained in the House or Senate bills. These include a proposal to eliminate $25 billion in corporate tax breaks over seven years. That is the same amount proposed by Republican Rep. John R. Kasich of Ohio, chairman of the House Budget Committee -- and passed by the House.

It was not clear precisely how Mr. Clinton expected to achieve his budget savings. In his Oval Office speech, he mentioned reducing "fraud and abuse" in Medicare and in cutting all discretionary federal spending, except for education and defense, by 20 percent over the next 10 years.

But the president proposed increasing federal spending in a host of areas, including education; job training; health care for those who lose jobs; health care for the elderly who need long-term, at-home care; environmental cleanup; nutrition programs for poor children and their mothers; Head Start; impoverished veterans and college loans; maintenance of the national parks; and increases to the federal judiciary.

"There is a right way to balance the budget and a wrong way," said Mr. Panetta. "A budget can't be all cut and slash. You've got to have some investments in people."

The savings come in areas such as Medicare, in which the president pledged no reduction at all in benefits and service and in anticipated -- and seemingly optimistic -- reductions in annual interest paid on the national debt.

But if the numbers in Mr. Clinton's 10-year budget are a little hazy, the politics seemed clearer.

While positioning himself as a voice for balancing the budget, Mr. Clinton also was standing up for traditional liberal Democratic programs, targeting Republican ideas for tax relief as sops to the rich -- and throwing down a challenge to the new Republican Congress: Work with me or I'll veto your appropriations bills and accuse you in the next campaign of perpetuating "gridlock."

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