WASHINGTON -- Flanked by American flags rippling in the breeze and serenaded by the overture to "Camelot," President Clinton and his erstwhile Republican adversaries praised each other at a White House ceremony yesterday as Clinton signed legislation to cut taxes and put the nation on the path to a balanced budget.
"We -- Democrats and Republicans alike -- were given the opportunity and the responsibility to finish the job of balancing the budget for the first time in almost 30 years and to do it in a way that prepares Americans to enter the next century, stronger than ever," Clinton said. "By large bipartisan majorities in both houses, we have risen to that challenge."
House Speaker Newt Gingrich, invited to speak by the president, looked out across the South Lawn, and said: "We have proven together that the American constitutional system works, that slowly, over time, we listened to the will of the American people, that we reached beyond parties, we reached beyond institutions and we could find ways to get things done."
The sight of Gingrich speaking at Clinton's lectern was testament to how far the two sides have come from the angry budget impasse of 1995 that led to shutdowns of government and to deep-seated distrust on both sides.
Three years ago, Gingrich rose to the speakership when Republicans swept Democrats from power in both houses of Congress for the first time in 40 years. It was an election in which Republican candidates had bashed Clinton as a closet liberal who raised taxes the moment he took office.
The next year, Clinton turned the tables by vetoing the Republicans' tax cuts and budget bills, denouncing them as "extreme." His actions prompted two disruptive government shutdowns, but most Americans blamed an uncompromising Republican Party more than they did Clinton.
Clinton sharpened the "extremist" argument last year in portraying Republicans in general -- and Gingrich in particular -- as zealots who wanted to gut education spending, pollute the NTC environment, turn their backs on the elderly and balance the budget on the backs of the poor, while handing tax breaks to the rich.
But on the night of his triumphant re-election victory in November, Clinton abruptly turned off the partisan rhetoric and held out his hand to the Republicans, promising to work in good faith for a budget solution that would satisfy the principles of both parties.
Yesterday's signing ceremony was the culmination of that effort. The legislation not only aims to balance the budget by 2002, it also cuts taxes by a net $95 billion over five years by granting a child tax credit, deductions for college education and a lowering of the capital-gains tax rate. Together, the tax changes offer breaks for the working poor, the middle class and the rich.
Both sides touted features of the compromise they cherish most: Clinton hailed the tax cuts that he hopes will make the first two years of college as common as a senior year in high school. Gingrich pointed to the streamlining of government red tape for small businesses and to a cut in inheritance taxes that will make it easier for owners to leave their small businesses to their children.
Clinton expressed gratitude and admiration for Gingrich, Senate Republican leader Trent Lott and every key Republican committee chairman and member of the party's leadership.
"They were dedicated partners," Clinton said. "They fought hard for their priorities."
Gingrich responded by personally expressing gratitude to Clinton and Hillary Rodham Clinton as well as Vice President Al Gore.
"Their willingness this year, coming off their victory, to reach out a hand and say, 'Let's work together' was the key from which everything grew," Gingrich said.
House Democratic leader Richard A. Gephardt was conspicuous his absence yesterday. A potential rival of Gore for the Democratic presidential nomination in 2000, Gephardt voted against the legislation, saying the tax breaks for upper-income Americans were unnecessary and unwise.
Yesterday, Gephardt urged the president to use his "line-item veto" authority for the first time, to delete a provision of the law that allows tobacco companies to claim as a tax deduction the cigarette tax increase included in the proposed tobacco settlement.
But even Gephardt conceded that this proposal probably is exempt from a line-item veto, and White House officials would not comment officially on Clinton's intentions.
Clinton's spokesman, Mike McCurry, said budget officials are looking at some 80 "special" tax loopholes in the legislation -- those affecting fewer than 100 people -- and will decide whether to urge Clinton to use the line-item veto on any of them.
In state capitals around the country, budget officials and governors offices are also studying the fine print of the sweeping budget legislation to determine what hidden costs -- or benefits -- it contains for their states.
Maryland will benefit
Maryland officials say they believe the state could save as much as $5 million next year when the federal government resumes paying financial aid for needy children of legal immigrants. Gov. Parris N. Glendening had directed the state government to pay for those benefits after the federal government stopped doing so last year.
"I am pleased that under the new federal budget, we believe some of the funding for these programs will be restored, allowing Maryland to reinvest a portion of those state dollars in other key areas," the governor said in a statement yesterday.
Meanwhile, in Washington both sides in the budget fight indicated that they realize there are enormous challenges still ahead, such as making the structural changes in Medicare and Social Security necessary to put those programs on a solid ground for decades to come. Any effort to reduce benefits for those programs has, until now, been considered political suicide for the party spearheading it.
"I hope we can tap this spirit of cooperation and use it to meet and master the many challenges that remain before us," Clinton said.
Pub Date: 8/06/97