Bush Assails Democrats Over Stalled Budget

President Bush blamed the federal budget impasse on Democrats in Congress Tuesday, lashing out at lawmakers for trying to gain political advantage from the issue rather than negotiating in good faith to reduce the deficit.

“I feel I kept my share of the bargain,” Bush told a nationally televised news conference. “Now it is up to the Democrats who control Congress.”

But congressional Democrats quickly responded with a well-orchestrated attack of their own on White House budget policies.

“I am saddened to see the President resort to partisan complaining on the budget,” House Majority Leader Richard A. Gephardt (D-Mo.) said in a statement. “For months the budget summit has been meeting in good faith to address a deficit that is the direct result of 10 years of Reagan-Bush economic and fiscal policies.”

Bush warned lawmakers that they would “bear heavy responsibility” if a failure to reach a budget agreement next month forces him to impose potentially crippling automatic spending cuts on Oct. 1, affecting an array of defense and domestic programs.

“As painful as such deep cuts would be, I must uphold the law,” Bush said. “I’m determined to manage them as best I can, knowing that I’ve done all in my power to avoid them.”

Bush faces serious problems, however, in trying to carry out such a threat. Many lawmakers are convinced that the White House has little choice but to find a way to avoid the roughly $100 billion in spending cuts called for under the Gramm-Rudman budget law because the Pentagon could not live with the consequences during the current crisis over Iraq’s invasion of Kuwait.

The Gramm-Rudman law would be revised if a deficit accord is reached, easing the targets and extending the timetable for achieving a balanced budget.

The crisis in the Persian Gulf has complicated the budget problem even further by boosting military outlays and by increasing the risk of recession because of higher oil prices.

Bush vowed to veto any spending legislation that would make the deficit deeper and renewed his pledge to support a capital gains tax reduction as a means to spur economic growth. The White House believes that lowering the tax on gains from the sale of investment assets, such as stocks and bonds, would boost business investment and help revive the economy.

The Bush Administration is fearful that a large deficit will keep interest rates high and plunge the economy into a recession, perhaps endangering Bush’s reelection prospects in 1992.

“Our current budget, or lack thereof, constitutes a real threat to the economic well-being of this country,” the President said in an unusually long opening statement at the news conference.

Despite the risks to the economy, Bush said he wants budget negotiators to stick to their ambitious original goal of slashing next year’s federal deficit by $50 billion.

By contrast, several lawmakers, worried that recent oil price hikes might cause a recession, have suggested scaling back the size of next year’s deficit-reduction budget package to lessen any immediate negative impact on the already sluggish U.S. economy.

Bush took advantage of his afternoon news conference, carried live on all television networks, to turn up the heat on Congress at a time when his personal popularity is riding high over the White House’s handling of the situation in the Persian Gulf.

The President met with reporters shortly after returning to Washington from his Maine vacation home for two days of talks and briefings. Before his news conference, Bush gathered with advisers to discuss the budget, but Budget Director Richard G. Darman and Treasury Secretary Nicholas F. Brady were out of town and did not attend the meeting.

Bush argued that the budget negotiations have dragged on for more than three months without any substantive accomplishment so far, largely because congressional Democrats have been trying to gain extra leverage over the White House.

“There were some saying: ‘Hey, we think we got the President over a barrel here. We’ve made him back away and give and give and give and get nothing,’ ” Bush said.

The talks, which were stalemated when Congress left for its summer recess earlier this month, are scheduled to resume after Labor Day.

Frequently displaying strong emotion over the budget issue, Bush accused Democrats of “laughing all the way to what they think is the electoral bank.”

Democratic lawmakers, however, insisted that they are not to blame for the impasse over how to reduce a deficit expected to exceed $220 billion next year unless the White House and Congress can agree on spending cuts and tax increases to narrow the budget gap.

“The President’s statement on the budget was not accurate and not helpful,” Senate Majority Leader George J. Mitchell (D-Me.) said. “If there has been an ‘abdication of responsibilities’ on the budget, it has been on the part of the President.”

Bush defended his Administration’s conduct of the budget negotiations with Congress, contending that he had gone the extra mile in trying to jump-start the deadlocked budget talks in late June by backing down on his “no new tax” campaign pledge.

But, although Republicans have suffered politically from Bush’s decision to change course and present a new proposal that includes higher taxes, Bush said Democrats have failed to respond with a budget plan of their own.

“After three full months, the Democrats have yet to offer one single proposal at the budget summit,” he said.

Shortly before Congress left town, Republican lawmakers disclosed a White House plan to sharply raise taxes on alcoholic beverages and to limit deductions for state and local taxes. But the proposal was never formally presented to Democrats, who decided not to present a counterproposal of their own.

Budget negotiators are expected to try to go into hiding when they resume bargaining next month. Rep. Bill Frenzel (R-Minn.) said he was told that talks will resume on or about Sept. 5 at Andrews Air Force Base, home to the White House’s Air Force One about 15 miles east of Washington. He said he plans to sleep at Andrews.