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Clinton talks of deal, accepting balanced budget in 7 years


WASHINGTON -- President Clinton yesterday reiterated his threat to veto the Republicans' budget proposals but stopped attacking them just long enough to outline the broad parameters of a possible compromise.

In an apparent concession, Mr. Clinton suggested that he would give Republicans their cherished seven-year timetable for balancing the budget -- but not all their proposed tax cuts.

At a White House news conference, the president began by reissuing his threat to veto the House-passed plan to curb Medicare. He accused Republicans of being extremists -- and suggested that they pass bills that actually have a chance of becoming law.

The Republican plan to trim Medicare costs by $270 billion over seven years, the president said, would "eviscerate" health care for the elderly. Although Mr. Clinton has proposed Medicare reductions, he kept up his verbal attack on their plans for Medicare and other programs as too Draconian.

'Think again'

"The Congress is about to take some votes that I believe will move this country in the wrong direction," the president said. "Before they do it, I want to urge them to think again. There's a right way to balance this budget and a wrong way. I strongly believe the Republicans in Congress are taking the wrong way."

"If anyone needs to 'think again,' in my view it's President Clinton," responded Senate Majority Leader Bob Dole, a Republican presidential candidate. "The president continues his cynical re-election campaign designed to scare the American people, especially senior citizens."

Mr. Clinton also blasted the Republicans for their plans to reduce the earned income tax credit, under which low-income working Americans are eligible for tax refunds that often exceed the taxes they pay. Republican leaders on Capitol Hill have characterized the tax credit, which Mr. Clinton has expanded, as a welfare program.

Democrats say the tax credit encourages people to work instead bTC of remaining on welfare.

The president did not get into that philosophical debate yesterday. Referring to a recent study by Congress' Joint Committee on Taxation, showing that under the GOP plan, half the workers in the country would see some kind of tax increase, Mr. Clinton simply threatened to veto the Republicans' proposals.

'Taxes on working families'

"I won't let you raise taxes on working families," Mr. Clinton said. "That is not the right way to balance the budget, it isn't fair, and it won't happen."

But near the end of his news conference, Mr. Clinton lowered the rhetorical volume and veered into the area of compromise. Asked about balancing the budget -- which his administration initially resisted and which it now says it would like to do over 10 years -- Mr. Clinton said: "I think we could reach it in seven years."

The president's own plans to rein in Medicare spending call for $140 billion in savings over seven years, and aides said privately that it does not take much imagination to come up with a figure between the $140 billion and the Republicans' goal of $270 billion.

Already, the president has agreed with Republican calls for a tax cut for families with children. He has also signaled a willingness to accept a capital gains tax that is targeted to encourage the creation of new businesses.

The budget fight of 1995 is not simply over money but also over spending priorities. On this matter, too, the president signaled a willingness to compromise -- but not to roll over.

"I think there's a way for me to meet their stated objectives, which is a balanced budget in seven years, with a family tax cut, and I think they want a capital gains tax cut, and extending the Medicare trust fund to 2006," he said.

At the same time, the president said, a deal would require the Republicans "to meet our stated goals, which is to maintain our commitment to our investments in education and our obligations to the elderly through the Medicare program, and to the elderly and our children and the disabled people in America through the Medicaid program, and our obligations to the environment and to technology and to the things that will make our economy grow."

Mr. Clinton touched on other matters, including:

* Tax gaffe: Responding to a furor this week caused by his regret at the size of his 1993 tax increase -- and his blaming of Republicans for it -- Mr. Clinton sought to clarify his remarks.

"What I meant to say is, I think nobody enjoys raising taxes," he said. "I think our system works better when Democrats and Republicans work together to reach consensus, and I think it would work better now if we did. That's what I meant to say."

* Race relations: He said he would follow up on his speech this week on race relations but was not certain just how. One idea being considered is a blue-ribbon advisory commission on race.

* Terrorism: He chided Congress for not passing his anti-terrorism bill. "It's been six months since the Oklahoma City bombing killed 169 of our fellow Americans -- and six months since congressional leaders promised that they would pass the anti-terrorism legislation by Memorial Day."

* Bosnia: He refused to put a one-year time limit on the stay of any American troops in Bosnia, even though his military commanders have said they believe a peacekeeping mission by the North Atlantic Treaty Organization can be completed in that time once a peace treaty is signed.

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