Party Leaders Trade Budget Accusations : Politics: As Clinton prepares to give his fiscal outline to Congress today, partisan scoffing increases. But Dole hints at a swap of a minimum wage hike for a capital gains tax cut.

On the eve of President Clinton’s annual budget message to Congress, Republican and Democratic leaders accused each other Sunday of lacking the political backbone necessary to cut spending enough to balance the federal budget.

Republicans said Clinton’s budget, which would leave the deficit hovering around $200 billion a year through the rest of this decade, failed to exhibit fiscal “leadership.” Democrats responded that GOP leaders were quick to criticize Clinton but slow to offer specifics of their own.

There was some talk of compromise mingled with the accusations flowing back and forth on various TV talk shows. For example, top congressional Republicans said they might support the Clinton Administration’s proposal to increase the minimum wage in exchange for a cut in taxes on capital gains.

And members of both parties were eager to assert which programs they would leave intact. Social Security, the government’s biggest program at $335 billion--about $1,300 for every man, woman and child in America--crowned almost everybody’s list of favored programs.

“Nobody--Republican, Democrat, conservative, liberal, moderate--is even thinking about using Social Security to balance the budget,” Senate Majority Whip Trent Lott (R-Miss.) said on CBS-TV’s “Face the Nation.” “So we will have some language which says we are not going to cut benefits.”

But Senate Majority Leader Bob Dole (R-Kan.) accused Democrats in the White House and Congress of spreading fear among the public with assertions that the GOP wanted to cut Social Security.

“It’s about time the Democrats started some leadership around here, instead of trying to scare people on Social Security or veterans or everything else,” Dole said on NBC-TV’s “Meet the Press.” “We’ll never have a balanced budget if everybody is going to be exempt.”

House Budget Committee Chairman John R. Kasich (R-Ohio) noted that Clinton’s budget barely dented the government’s enormous entitlement programs--those that guarantee federal benefits to people who meet eligibility requirements.

“When you look at entitlements, which is the most rapidly growing area of the budget, this budget clearly lacks courage,” Kasich said on ABC-TV’s “This Week With David Brinkley.”

But Kasich himself, unable to get his fellow Republicans to rally around a blueprint that would put the budget on course toward balance, has postponed unveiling his plan by more than two months.

Laura D’Andrea Tyson, chief of the White House Council of Economic Advisers, picked up on the Republicans’ difficulties, accusing GOP leaders of trying to make political points without shouldering any of the burden.

“I heard a lot of discussion . . . about the need to get the deficit down, and not a single specific was mentioned,” Tyson said on “Face the Nation.”

Republicans displayed a tentative willingness to bargain on at least one issue. Dole, responding to a question, seemed receptive to supporting a White House proposal to raise the minimum wage if Democrats would in turn back a cut in the capital gains tax rate. President Clinton proposed Friday to increase the $4.25 federal minimum wage by 90 cents over two years.

“It might be a good trade,” Dole said of such a deal.

Dole’s seeming interest in the idea sparked a response from both sides of the political aisle, with GOP leaders cautiously endorsing the compromise and Democrats fearing a trap.

“I’ll take a capital gains cut any way I can get it,” Rep. Bob Livingston (R-La.), chairman of the House Appropriations Committee, said on “Face the Nation.”

Livingston criticized an increase in the minimum wage as “a destroyer of jobs” because “middle-class business people have to hire fewer people if the minimum wage goes up.” But he said he might be persuaded to support it anyway.

“I’ll look for any bargain I can get to encourage a capital gains cut because it means more jobs,” he said. “A capital gains cut is a jobs-creator.”

But Tyson criticized a capital gains tax cut, saying it would help the nation’s wealthiest and increase economic inequality.

“The evidence on capital gains tax relief as an incentive to savings and investment is actually very weak,” Tyson said. “So when someone says they know for sure this will create jobs, if you go to the economic evidence, you do not know for sure that it will create jobs. What you do know for sure is that the top 75% of the gains will go to the top 10% of the income distribution.”

On a non-budgetary issue, GOP leaders attacked Clinton’s nomination of Dr. Henry Foster Jr. as surgeon general because the Tennessee obstetrician has acknowledged performing about a dozen abortions--primarily to save the mother’s life or in cases of rape or incest--during his 30-year career.

Some GOP officials castigated the White House for failing to disclose that information before the nomination.

Although Lott stopped short of calling for the President to withdraw the nomination, he said: “I do think it is in serious trouble.”

* AID TO STATES IMPERILED: Officials warn U.S. budget cuts could reduce aid to states. A17