Packwood Shows Shift in Ideas on Budget : Congress: Chairman of Senate’s finance panel now says government can cut taxes while reducing deficit. President, Sen. Gregg trade barbs over spending.

Senate Finance Committee Chairman Bob Packwood (R-Ore.), in an apparent shift of position, said Saturday that cutting taxes while balancing the federal budget “is doable.”

But Packwood, whose committee has great influence in shaping budget and tax legislation, said the tax cut could not approach the magnitude sought by House Republicans--$189 billion over five years.

Packwood had said last month that he favored deficit reduction and budget balancing over any tax cut. But speaking on CNN’s “Evans & Novak” Saturday, he said, “I think we can do both.”

“Between the two, if I could only do one, the balanced budget would occupy a higher priority than the tax cuts,” he added.

Packwood’s change of emphasis came as President Clinton and a GOP spokesman traded accusations over federal spending.

Clinton, in his weekly radio address, denounced Republican proposals to cut education programs, ranging from Head Start to college loans to school lunches.

In the GOP response to Clinton’s address, Sen. Judd Gregg (R-N.H.) dismissed the President’s efforts to restore democratic rule in Haiti as wasting $1.5 billion and replacing “one bunch of thugs with another.” Clinton visited the Caribbean island Friday to mark the transfer of the U.S.-led mission to United Nations control.

Although Packwood’s comments indicated a change in his thinking, he nonetheless suggested sharp disagreements remain between the House and Senate over tax-cut strategy. The Oregon senator branded House GOP calls for a $500 tax credit for each child in families earning up to $200,000 a year “one of the worst ways to cut taxes.”

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“If we should be moving toward savings and investment and productivity, the $500-per-child tax credit is probably the worst way to go to improve our economy,” he said.

He said he expected Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) to produce a balanced budget “without touching Social Security and without any change in the consumer price index.” If he can do that, “then there is room also for tax cuts.”

“The question will be, does he have the votes to pass that balanced budget that he will have,” Packwood said. “I don’t know if he does or not.”

Clinton’s defense of the Administration’s education programs were broadcast during his return to his home state of Arkansas, where he spoke from Gibbs Elementary School in Little Rock, a magnet school for international studies.

Clinton contrasted bipartisan support in the last Congress for expanding Head Start, apprenticeships and college loans with proposals in the current Congress to cut education programs. “That’s wrong,” he said.

Close to half of the students at the Gibbs school depend on “the school lunch program for a nutritious meal,” Clinton said. “And all these young people--not just those who have the money to afford it--should be able to go as far as their talents will carry them. And if that means they need scholarships, student loans and the opportunity to do community service, we ought to give it to them.”

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Gregg, in addition to questioning “why the President is making such a big bunch of hoopla about what is happening in Haiti,” condemned Clinton’s budget for containing $200-billion deficits “every year for as far as the eye can see.”

“If we continue to add the debt to the shoulders of our children,” Gregg said, then the postwar baby boom generation “is going to end up being the first generation in the extraordinary history of this country to pass on to our children less than was given to us by our parents.”