11th-Hour Budget Talks Break Down : Government: Plan for Panetta to meet with Gingrich and Dole is scuttled over whether other Democrats could attend. Clock ticks toward shutdown of federal services.

Proposed emergency talks between the White House and congressional leaders to avert a looming budget crisis fell through Saturday as plans moved ahead to partially shut down the government when its current spending authority expires at midnight Monday.

President Clinton, responding to an invitation from House Speaker Newt Gingrich (R-Ga.) and Senate Majority Leader Bob Dole (R-Kan.), had directed Chief of Staff Leon E. Panetta to present “straightforward ideas” on how to avoid the shutdown at a proposed afternoon negotiating session.

But Republican leaders balked at Clinton’s insistence that Democratic lawmakers also take part in the talks. House Budget Committee Chairman John R. Kasich (R-Ohio) said he wanted direct negotiations between the GOP lawmakers and Panetta, adding “we don’t need more people in the room.” Dole said Republicans did not need “chaperons” to talk with the White House.

Gingrich and Dole then tried calling Clinton to revive the proposed discussions, but Dole contended that Clinton “in effect” told them to “get lost.”

The rhetoric grew progressively sharper in what amounts to a high-stakes game of budgetary chicken. “We want to balance the budget,” Dole declared. “He wants to shut down the government.”

Clinton, saying he does not want to “shut down basic government services for the American people,” nevertheless vowed to veto a temporary spending bill that would keep the government in operation for a few more weeks while Congress completes action on a fiscal 1996 budget.

The President said in his Saturday radio address that he cannot accept the temporary funding measure, approved by the House on Friday and scheduled for final Senate action Monday, because it would increase Medicare premiums for senior citizens and significantly reduce funding for education and environmental protection.

Clinton also attacked restrictions attached to a companion measure to temporarily increase the nation’s debt ceiling to avert a federal default, which could come as early as midweek. The restrictions, which would limit the Treasury secretary’s ability to juggle funds during a debt-limit crisis, amount to “a shortcut to default on the full faith and credit of the United States,” Clinton said.

The debt-limit measure has been approved by both houses of Congress and can be sent to the White House at any time. But it had not been received by Saturday evening, “so there’s nothing here to veto,” White House Press Secretary Mike McCurry said. But the President has promised to veto the measure once it arrives, adding yet another element of uncertainty and risk to the budget impasse.

The temporary spending bill and debt-ceiling measure represent the most immediate flash point in the broader budget battle between the Republican-controlled Congress and Clinton. The House and Senate have not yet completed action on many of the major appropriation bills needed to finance the government during the fiscal year that began Oct. 1, and Clinton has vowed to veto several of them as well.

For the past six weeks, government operations have been financed under a relatively simple temporary funding measure that expires at midnight Monday. But instead of passing a similar measure to extend the temporary funding authority, Republicans in Congress insisted on drafting a second measure calling for deeper spending cuts than the first and including a Medicare premium increase that is part of the GOP’s long-term plan for reforming the program. Clinton promised to veto the temporary funding bill if those provisions remain in it, leading to the current standoff.

In his radio address, Clinton likened the impasse to that of a hard-pressed family facing a tight-fisted banker. “Imagine the Republican Congress as a banker and the United States as a family that has to go to the bank for a short-term loan for a family emergency. The banker says to the family: ‘I’ll give you the loan, but only if you’ll throw the grandparents and the kids out of the house first.’ Speaking on behalf of the family, I say: ‘No thanks.’ ”

Conceding that it appears “increasingly likely” the impasse will lead to a government shutdown, White House Budget Director Alice Rivlin said Saturday that plans were proceeding to furlough about 800,000 of the government’s 1.9 million civilian workers, beginning Tuesday.

Only those who provide services needed to protect life and property from imminent threat will keep working, along with those whose activities already have been funded, she said.

While the impact of a government shutdown would not be immediately noticeable to most Americans outside Washington, a shutdown lasting more than a few days could hurt the economy and have other serious effects, Rivlin said.

The shutdown will not affect uniformed military personnel, emergency activities, law enforcement, federal prisons, border control, customs, air traffic control and health services, such as veterans’ hospitals. Social Security checks and Medicare benefits will continue because they are permanently appropriated, Rivlin said.

But applications for Medicare and Social Security will not be processed. Medicaid, Supplemental Security Income and Aid to Families With Dependent Children would continue through December because the first quarter of the fiscal year for those programs has been funded, the budget director said.

While the shutdown would affect only nonessential services, it would be disruptive for some Americans, Rivlin warned. A businessman who needed a passport for a foreign trip, for example, would be unable to get one. Citizens planning to visit a national park would find services curtailed; federal museums would be closed. Government contractors would not be paid, and military recruiting would cease.

“If you’re a government contractor, you will not be paid,” she said. “You can go on doing some work, I guess, but you won’t be paid for it.”

Denouncing the likely shutdown as “stupid” and “unnecessary,” Rivlin attacked the Republicans for increasing Medicare premiums in the temporary funding measure, which is called a continuing resolution, rather than “in an orderly way” during budget negotiations.

Clinton, who drew criticism from Gingrich and Dole on Friday when he went off for a round of golf after urging steps to avoid the shutdown, canceled a trip to Boston on Monday to take part in a health care discussion and a political fund-raiser.

“In light of the very clear likelihood that we will be in the process of shutting down the federal government Tuesday, the President believed it was appropriate for him to be here,” McCurry said.

Disagreements between the White House and Congress have interrupted federal spending authority nine times since 1981, but they resulted in workers being sent home only four times. Only one shutdown lasted more than a day, and it came during a three-day holiday weekend five years ago.