Clinton again vows to veto GOP bill President says package on spending 'absolutely shreds our values'


WASHINGTON -- The House and Senate began debate yesterday on sweeping budget-balancing legislation, but President Clinton vowed to veto the GOP measure that he called an "extreme budget that absolutely shreds our values and will weaken our economy."

Republicans responded by accusing Mr. Clinton of trying to scare the public. As if to show their resolve, Senate Republicans predicted they would defeat a Democratic amendment to ease proposed reductions in Medicare.

A final vote on the budget legislation is expected in the House today and in the Senate tomorrow. Differences between the two versions would then have to be ironed out before a bill was sent to Mr. Clinton.

The GOP budget would eliminate the deficit over seven years by reducing spending on programs that mainly help the elderly, the disabled and poor families. It would also cut taxes, mostly to benefit upper-income and middle-class taxpayers.

In opening the Senate debate, Majority Leader Bob Dole of Kansas called the budget an historic step toward fiscal responsibility. "The vote," Mr. Dole said, "will be a defining moment."

Mr. Clinton was unimpressed.

"It balances the budget, but it still mortgages our future," Mr. Clinton said during an afternoon news conference.

The president particularly objects to cuts in education and training programs his administration has promoted.

Mr. Clinton's veto threat came as he announced that the budget deficit for the fiscal year ending in September shrank to $164 billion, down from $203.2 billion in 1994, for the third consecutive decline. He credited the economic program Democrats passed when he took office in 1993.

The $164 billion deficit figure, a 19 percent decline from 1994, was in line with financial market expectations. However, the Congressional Budget Office has projected that without changes, especially in the government's large benefit programs, the deficit will resume its upward climb, hitting $284 billion in the year 2000.

At times, the president has gone out of his way to sound conciliatory toward the Republican majority in Congress. Only last week, Mr. Clinton said he was willing to consider the GOP's seven-year timetable for a balanced budget. But his tone was confrontational yesterday.

He also accused Republicans of engaging in "economic blackmail" by attempting to link a must-pass increase in the $4.9 trillion federal debt limit to his acceptance of their budget.

Without the debt-limit increase, the government risks defaulting on billions in interest payments due to creditors next month. A prolonged standoff on the debt limit could prevent the Treasury Department from honoring Social Security checks for retirees.

However, many lawmakers and independent observers still expect Mr. Clinton and the GOP to come to terms. But it probably will not happen until after a round of vetoes that Republicans lack the votes to override.

Mr. Dole had more immediate worries than a veto threat. He was negotiating with a half-dozen or so moderates in his own party, whose votes are crucial to passing the budget bill. Republicans have a seven-vote majority in the Senate.

The moderates are trying to ease spending reductions in the Medicaid health program for the poor and severely disabled, as well as cuts in student aid and the earned income tax credit, a government payment to working poor families. Moderates also want to maintain federal standards for nursing-home quality.

In the House, GOP leaders were working to win over farm state legislators who object to cuts in crop and dairy subsidies.

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