Budget divide mostly bridged; Clinton, GOP leaders say lingering issues blocking final deal


WASHINGTON -- President Clinton and Republican congressional leaders congratulated themselves yesterday on resolving most of their budget differences but said they could not complete a deal until next week at the earliest.

Both sides said remaining trouble spots are blocking a final agreement, which Republican leaders had hoped the House might be able to vote on today. One key obstacle is how to make up a $6 billion gap in revenue.

House leaders canceled today's session and told members they would not need to return to Washington from a Veterans Day recess until Tuesday, when the Senate is also scheduled to return.

Clinton celebrated his success in overcoming Republican resistance to spending a second installment of nearly $1.4 billion for hiring more teachers to reduce class sizes in public schools. Republicans had insisted that local school authorities be given the flexibility to spend the money according to their own priorities.

Under the compromise reached Wednesday night, local authorities could use up to 25 percent of the money for teacher training rather than for hiring teachers.

Clinton called the compromise "truly good news for our children and for their future. We know that school enrollments are exploding, record numbers of teachers are retiring. Research is clear that students do learn more in smaller classes, with quality teachers."

House Majority Leader Dick Armey, a Texas Republican, said the additional flexibility was "an enormous victory" for the notion that "schools serve the children best when local officials are held accountable."

The Republicans met Clinton more than halfway on the teacher-hiring issue, which the president had declared his top priority as the budget talks moved into their final stages this fall.

Both parties have been eager to portray themselves as vigorous advocates of better schools as they approach an election year in which education is likely to be a central issue. Armey also observed that any president enters congressional budget negotiations with a strong hand.

"The president of the United States has his priorities, and no legislative body can ignore them," Armey said.

Clinton's negotiating leverage was further strengthened once the Republican-led Congress, for fear of incurring the voter anger that resulted from Congress' use of that tactic in 1995, ruled out the use of its power to shut down the government.

The Republicans appear to have succeeded in restraining some of Clinton's spending proposals and in conducting a more orderly budget process than is usual.

In last year's slapdash budget talks, conducted just before the congressional election, Congress struck a deal with Clinton that covered nine of the 13 spending bills and exceeded the spending ceilings by $21 billion that was demanded at the last minute by the president. All of the extra spending came out of the Social Security surplus.

This year, Congress negotiated each of the 13 bills separately and produced total spending that is expected to exceed the spending ceilings by nearly $17 billion.

By Republican estimates, none of that money will come from the Social Security surplus. Democrats contest some of the Republican accounting.

The Republicans won a tactical victory over Clinton in securing his pledge to join them in ending the long-standing tradition of borrowing from Social Security to pay for other programs.

Administration officials have also signaled that they might be willing to achieve that goal by agreeing to an across-the-board cut in most government spending for next year, but not as large a cut as the Republican proposal of nearly 1 percent. Clinton had labeled such a cut "mindless."

As White House and congressional negotiators resume their formal talks today, several other difficult issues remain. Among the most troublesome is an abortion dispute that is holding up approval of a first payment toward nearly $1 billion in overdue U.S. dues to the United Nations.

Rep. Christopher H. Smith, a New Jersey Republican, is leading anti-abortion activists who refuse to support the payment because the United Nations gives money to family-planning agencies that advocate abortion.

Armey said that dispute will be the last one worked out before Congress completes its work and adjourns for the year.

Sen. Robert C. Byrd, a West Virginia Democrat, is threatening to bar a final deal until he wins a legislative directive to nullify a federal court ruling that would limit mountaintop mining in his state.

The ruling, which is intended to curb the pollution of streams and valleys where mining spoil is dumped, threatens thousands of jobs in the coal industry, Byrd said.

Many lawmakers and the Clinton administration oppose such a directive.

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