$16.4 Billion in Cuts Backed; Veto Planned

House and Senate negotiators approved a record $16.4 billion in spending cuts Tuesday, as White House aides confirmed that President Clinton plans to use his first veto to block the bill, which would take most of its cuts from federal housing assistance and other programs for the poor.

In threatening to veto the 1995 “rescissions” package--so named because it would rescind funds previously committed but not yet spent on scores of federal programs--Clinton is sending the message that he is willing to return a measure to Congress, even though it involves tough choices for him.

In this case, a veto would kill two items that the Administration wants: $6.7 billion in disaster relief for California and other states and $240 million to beef up anti-terrorism efforts in the wake of the Oklahoma City bombing.

But a veto also would strengthen Clinton’s hand in the full-scale budget battle to come this summer.

Many liberal groups were waiting nervously to see if Clinton would veto the measure and some officials were acknowledging anxieties about whether the often-accommodating Clinton would make the tough choice.

But White House aides said the fact that the conferees did little to improve the bill made the choice somewhat less difficult. One official said that the veto offers Clinton a welcome opportunity “to lay out a road map on the right way to make deficit cuts.”

Noting that the GOP-controlled negotiating panels had restored more than $1 billion for pet building projects at the expense of programs for the poor, Democrats denounced the spending cuts package as regressive and vowed to oppose final passage.

But Republicans called the bill proof of their determination to balance the budget.

“It would be bad politics to veto this bill,” said House Appropriations Committee Chairman Robert L. Livingston (R-La.), adding that the cuts in the package are evidence that the Republicans “are keeping our promises” to lower the deficit.

While affecting only 1% of this year’s federal budget, the spending cuts approved by GOP appropriators during more than a week of arduous negotiations represented the largest rescissions package ever proposed.

However, it still represented only a small fraction of the more than $1 trillion in additional cuts that the Republicans would have to make over the next seven years to keep their promise of balancing the budget by 2002--a task whose difficulty was underscored by the problems the appropriators had in assembling what they admitted was only a modest “down-payment” on reducing the deficit.

In the end, the negotiators agreed to cut or eliminate more than 60 federal programs, mostly in the areas of housing, health, education and job training.

Public housing assistance took the biggest single hit, with the conferees agreeing to rescind $6.3 billion in unspent appropriations.

Although Senate negotiators moderated many of the even steeper cuts approved by the House in its original version of the bill, the conferees also slashed $1.3 billion from the Department of Labor, including all of the funds that had been appropriated for 1996 summer jobs for youth.

The cuts in social spending were steeper than those originally negotiated in the Senate to defuse a threatened Democratic filibuster. GOP lawmakers said that the need to offset the cost of the anti-terrorism package increased pressure to make steeper cuts. But the social spending that Democrats sought to protect took an even bigger hit when conferees voted to preserve more than $1 billion that the Senate originally voted to cut from pet construction and highway projects in lawmakers’ districts.

Despite their anger and frustration, it was not clear if Democrats would try to filibuster the agreement as it moves to the Senate for final passage. Democratic strategists indicated that their members were divided, with some favoring a filibuster but others reluctant to take the blame for blocking the disaster relief and anti-terrorism funds.

They also argued privately that they should let the package pass in the belief that it will ultimately backfire on the Republicans as voters begin to see its impact.