Clinton Draws Line in the Sand on Budget, Aides Say : White House: Tougher approach surfaces during closed-door meeting with congressional leaders. Move is seen driven by politics and principles.

As a senior Administration official describes it, the gauntlet on the looming confrontation over financing the federal government was thrown down nine days ago in the Oval Office, when President Clinton met with House Speaker Newt Gingrich (R-Ga.), Senate Majority leader Bob Dole (R-Kan.) and other congressional leaders to discuss the possibility of a budget compromise.

“If you’re determined to undermine the government’s role in things I believe in, you’ll have to put someone else in that chair,” Clinton said, pointing to the leather-covered seat behind his desk. “It won’t be me. I’m not going to sit in that chair over there and allow you to destroy the role of the federal government to do things I believe in.”

Clinton has made similar sorts of statements in public in the past and has often backed away from them. But aides who provided the account of the meeting with the congressional leaders insist that this time he really means it--despite justifiable skepticism on the part of many observers about the President’s willingness to actually follow through on his tough rhetoric.

To explain why doubters should accept Clinton at face value this time, the aides offer a set of explanations that mixes both political calculation and what they say are Clinton’s core principles about the role of government in society.

Earlier, Clinton had often talked of compromising with Republicans on their budget demands--talk that had drawn sharp complaints from Democrats in Congress and elsewhere. The hard line, spelled out publicly Thursday by White House Press Secretary Mike McCurry, is widely viewed as a swing in Clinton’s position.

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Administration officials insist that the President had never meant to suggest he would retreat from his basic beliefs. Nor, they say, was he ever prepared to accept the GOP’s plans to reduce taxes and substantially rein in future funding for welfare, Medicare, Medicaid and other programs.

But as polls have shown public support for the Republican agenda eroding and his own standing firming up, Clinton and his strategists have unquestionably gained political leverage. And, as the yearlong “Republican revolution” has come down to the struggle over a single all-embracing budget bill in the final weeks of this congressional session, the White House has chosen to take an increasingly confrontational position.

The White House still hopes to reach a compromise, though probably not until after a short shutdown of the government next week and a veto of the overall budget bill later this month.

But after extensive debate inside the inner circle, Clinton and his top advisers have concluded that they must--and politically should--stand firm instead of yielding to the Republicans.

So hard is the White House playing its hand that, for the first time, senior aides are suggesting the stalemate over the budget and government funding could continue for the next year.

“The talk now,” said a senior White House official, “is about the possibility of stop-gap funding and having a stalemate through next year and let the voters decide next November. A stalemate wouldn’t be a pretty picture, but it might be better to swallow hard and put things on hold for a year.”

In a showdown before the voters, some senior officials say, Clinton would prevail. Voters would ultimately see him as the leader who saved Medicare from excessive spending curtailment, preserved the environment and headed off tax cuts that give too much to the rich, these officials say.

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“This is not an election about balancing the budget. It’s more likely to be an election about Medicare,” one top White House official said.

Still, senior aides say Clinton did not draw a line in the sand based on poll numbers.

“It’s a chicken-and-egg situation,” McCurry said in an interview. “Because the President has stood firm on his principles and made clear what the Republican budget would do to the American people, the people have responded by demonstrating more support for him and more opposition to the Republican plan.”

If Republicans or Democrats had any doubt about Clinton’s resolve, Administration officials said, the President worked hard to dispel them by firmly enunciating his position at the two-hour, closed-door meeting with the congressional leadership on Nov. 1.

“You have never accepted my principles of the federal government protecting the environment and protecting the interests of children,” an official who was present said Clinton told the Republican leaders.

His tone was not confrontational, said Treasury Secretary Robert E. Rubin, who attended the session, but “I think they clearly understood that if there were to be budget negotiations, they had to be consistent with his principles.”

That was the first time the Republicans really realized that Clinton would not give in on any of his basic positions, McCurry said, and it was when “the President first began to realize the Republicans were not going to budge on their cuts in Medicare, education, and environmental protection.”

Clinton, according to McCurry, told Dole and Gingrich that he had made some Democrats “furious” last June by telling the Republican leaders he accepted some of their principles of balancing the budget, cutting taxes and reforming welfare and Medicare.

From all accounts, the session was crucial not only for Clinton to get his message across, but for him to understand the problem Gingrich would have if he tried to persuade Republican House members, especially his crew of strong-willed freshmen, that they should compromise with the President.

“Gingrich told the President that he would have to understand that there was a dynamic at work in the House and that they would have to move forward,” said a White House official.

As the session was winding down, the official said, White House Chief of Staff Leon E. Panetta summed it up by telling the Republican leaders: “The President came in believing the federal government has a role that must be preserved. You have other ideas. So you have to do what you have to do and send us the reconciliation bill so we can veto it and send it back.”