House Passes New Stopgap Bill, but Clinton Vows Veto : Budget: President cancels Japan trip and pledges to stand fast despite shutdown. Spending measure goes to Senate, keeps seven-year timetable on ending deficits.


The House passed a new temporary spending measure early today intended to end the government shutdown, but President Clinton vowed to veto it, saying he was prepared to hold firm in the budget standoff “even if it’s 90 days, 120 days or 180 days.”

To underline his position, Clinton canceled a planned diplomatic mission to Japan this weekend, sending Vice President Al Gore in his place.

In another reflection of the escalating consequences of the budget impasse, Treasury Secretary Robert E. Rubin announced that he had borrowed from two civil service trust funds to avoid defaulting on the national debt.

The House passed the new stopgap spending measure on a vote of 277 to 151, and the Senate planned to complete action later today. Clinton vetoed the first version on Monday, triggering a partial shutdown of government operations and sending some 800,000 federal workers home on indefinite furloughs.


The new measure, which would restore normal operations to the government while the Congress completes its work on various budget bills--omits a proposed Medicare premium increase that Clinton said he could not accept. But it also would commit the President to a firm seven-year time frame for balancing the federal budget using conservative congressional economic estimates.

Clinton so far has refused to embrace a budget-balancing timetable in the absence of a broader budget agreement.

“If the American people want the budget that they [Republicans] have proposed to be the law of the land, they’re entitled to another President, and that’s the only way they’re going to get it,” Clinton said in an interview on CBS television. “This is an exercise of raw, naked power.”

Clinton said the GOP was demanding “a level of cuts in Medicare and Medicaid, in education, in the environment and a tax increase on working people, all of which I find objectionable.”

Congressional Republicans said they decided to remove the proposed Medicare premium provision from the temporary funding bill in an effort to underscore Clinton’s reluctance to commit himself to a specific timetable for eliminating the federal deficit. Senate Majority Whip Trent Lott (R-Miss.) said the White House had been using the Medicare issue as a “mask” to cover up its opposition to a seven-year timetable.

“We’re going to give him a chance to sign up for a balanced budget,” House Speaker Newt Gingrich (R-Ga.) told reporters.

Senate Minority Leader Tom Daschle (D-S.D.) accused Gingrich of provoking the crisis. “He wants chaos,” Daschle said. “He wants collapse of the government, and now he’s got it.”

Terms Failed in Talks

Senate Majority Leader Bob Dole (R-Kan.) said that if Clinton rejects the new measure, “the burden dramatically” shifts to him for preventing government workers from going back to work.

The White House flatly rejected the terms contained in the revised funding bill when they were proposed during closed-door negotiations earlier this week, according to Administration officials, and GOP leaders said that they expected the President to veto it.

Republicans are insisting on the use of the economic forecasts of the Congressional Budget Office, while the White House wants to rely on the more optimistic assumptions of the Office of Management and Budget, which the Administration maintains are more accurate.

In a separate development that will limit the scope of the government shutdown, Clinton signed late Wednesday a $12.6-billion transportation bill that will return 22,000 federal employees to their jobs today. The bill had been passed by the House and Senate last month but was not sent to the White House until Wednesday.

Both the House and Senate, meanwhile, passed a $23.2-billion bill to finance the Treasury Department, the Postal Service, the White House and other federal agencies. The House approved the measure by a vote of 374 to 52, and the Senate by a vote of 63 to 35. Clinton is expected to sign the bill, which will put another 90,000 federal employees back to work.

As the partial suspension of government services extended through a second day, Rubin said he had been forced to dip into the two government pension funds for the first time in history so Washington could honor its financial obligations.

Rubin said the extraordinary actions were taken because the United States had reached the $4.9-trillion debt limit imposed by law but was obliged to make $24.8 billion in interest payments Wednesday to holders of U.S. securities, in addition to other obligations.

“I have taken actions to prevent a default for the first tine in our history on the full faith and credit of the United States,” Rubin said, adding: “This is no way for a great nation to manage its financial affairs.”

The day’s developments dramatized the depth of the discomfort felt by both sides and lengths to which they are willing to go to try to deflect blame.

Gingrich Cites ‘Snub’

In a candid acknowledgment of the personal tensions fueling the crisis, Gingrich told reporters that the GOP position had hardened in part because he and Dole felt they were snubbed by the White House during their trip last week to Israel for the funeral of Israeli Prime Minister Yitzhak Rabin.

He said the President had not spoken to him and had treated him and Dole discourteously by showing them out the rear entrance of the airplane.

“That’s part of why you ended up with us sending down a tougher continuing resolution,” he said. “This is petty . . . but I think it’s human. You travel 25 hours with somebody . . . and nobody has talked to you, and they ask you to get off a back ramp so the media won’t get a picture of the Senate majority leader and the Speaker of the House returning from Israel. Where is their sense of manners? Where is their sense of courtesy?”

Clinton’s failure to discuss the budget with Gingrich and Dole on the trip made it clear that the Administration “wanted a fight,” Gingrich said.

White House spokesman Mike McCurry, however, asserted that Gingrich was “treated with the utmost courtesy” during the trip. The Speaker saw Clinton during an airborne briefing on the Mideast situation and on the return trip, he added.

Dole and Gingrich were let out the rear exit of the aircraft because “that’s the fastest way off,” McCurry noted.

Assessing the impact of the government shutdown, McCurry acknowledged that both the Administration and Congress were “feeling the heat.”

Japan Trip

Until Wednesday, White House aides had insisted that Clinton would make the trip to Japan, combined with attendance at the annual meeting of the Asia-Pacific Economic Cooperation forum in Osaka. Diplomats on both sides of the Pacific had viewed Clinton’s participation as essential, and the White House said earlier in the day that canceling the trip would be an “appalling” development.

“It is regrettable that Congress’ failure to pass a budget that protects the American people, keeps our government open and keeps our country out of default has compelled the President to cancel his trip,” McCurry said in announcing the decision to send Gore in Clinton’s place.

The Japanese government expressed disappointment today over Clinton’s cancellation but politely said they looked forward to greeting the vice president.

“It’s really regrettable that he can’t make it,” Prime Minister Tomiichi Murayama was quoted as saying by Japan’s public broadcaster, NHK. “But I suppose it can’t be helped.”

Clinton had planned to mend a growing rift over the two countries’ military alliance, aggravated by the recent trial of three U.S. servicemen in the rape of a 12-year-old girl on Okinawa. Okinawa Gov. Masahide Ota said the cancellation was “extremely disappointing.”

McCurry said the President changed his mind about the Asia trip because of “hardening attitudes” in Congress, particularly the decision by GOP leaders to send the President a funding measure the White House has “repeatedly made clear is unacceptable.”

“So clearly the lines in this battle are being frozen,” McCurry said. “There’s not any indication of movement on the part of the Republican leadership. So that means that we have to prepare ourselves for the reality of a fairly long duration now.”

Parks Are Closing

McCurry estimated that during the first full day of the shutdown, 28,000 Americans lost a chance to apply for Social Security benefits, 22,000 were unable to get overseas visas, 726,000 lost a chance to visit national parks, 1,613 couldn’t apply for government compensation or pension benefits, and 700 were unable to enlist in the military.

The National Park Service announced that it would begin closing parks and asking visitors to leave Wednesday night. Campgrounds, lodgings, restaurants and other concession services were all to be shut down by 3 p.m. Friday and remain closed until the budget impasse is resolved. Hiking and backpacking will be prohibited on all Yosemite trails.

Roads through parks will also be closed, except for through routes, such as the Tioga Pass across the high country of Yosemite National Park.

Grand Canyon National Park is closing for the first time since it opened in 1919 because of the budget shutdown. Reservations at Grand Canyon hotels and campgrounds are being canceled, and all concessions and tours in the area will be shuttered. Charter flights to the Grand Canyon from Los Angeles and Las Vegas were also canceled.

Republican leaders said that the overwhelming majority of phone calls flooding congressional offices were from constituents urging them to “stay the course” and not accede to the President’s demands to scale back the budget priorities embodied in their temporary funding bill.

“The people are geared up for the hard choices and want us to stand firm,” said Sen. Kay Bailey Hutchison (R-Tex.).

Hutchison said her offices had received more than 1,000 calls in support of the GOP position and fewer than 10 urging Republicans to yield to the President’s demands to get the government back to work on his terms.

But veteran Republican staffers acknowledged that calls to congressional offices are not a good measure of public opinion because people tend to call politicians they support.

Gingrich called a meeting of Senate and House GOP press secretaries to try to unify their message around the theme that the conflict with the White House is a result of the President’s reluctance to commit to a balanced budget.

Gingrich showed the press secretaries a preview of a GOP television commercial that pieces together sound bites in which Clinton at various times has endorsed the idea of balancing the budget in five, seven, nine and 10 years.

The decision by Treasury Secretary Rubin to convert $61.3 billion in Treasury securities held by pension funds into cash creates room for the government to meet its immediate borrowing needs while remaining below the debt limit through late December, officials said.

Under federal law, the Treasury secretary is authorized to tap into the Civil Service Retirement and Disability Fund, which has $350 billion in assets, and also the Federal Employees Retirement System’s Government Securities Investment Fund, with $21.5 billion. The borrowing must be repaid with interest.

The funds “will remain whole, and anyone who says otherwise is simply mistaken,” Rubin said.

In theory, such borrowings are bookkeeping moves that are not counted as adding to the national debt and could help keep the nation under the debt ceiling for many months, according to analysts.

Lott said Congress would “clean up after the secretary” after the fiscal crisis passes.

Times staff writers Paul Richter, Gebe Martinez, Faye Fiore, Jonathan Peterson and Colleen Krueger contributed to this story.


Who’s on the Job

A breakdown of which offices and agencies are working through the government’s partial shutdown:


* Social Security offices that send out checks and payments for Medicare, Part B, the hospital part. These offices are permanently appropriated.

* FBI offices

* Alcohol, Tobacco and Firearms

* Bureau of Prisons

* Border Patrol offices

* U.S. Customs offices

* Postal Office (post office is self-supported)

* Air traffic control

* Amtrak

* IRS offices are open to continue collecting quarterly tax payments and process cases that will be harmed if interrupted.

* Veterans Hospitals

* Indian health services

* Justice Department (to prosecute criminal cases)

* Embassies (minimal services, such as emergency visas)

* Agriculture Department (Congress has passed an appropriations bill for the department)

* Passport office (only for emergencies.)


* Social Security offices are closed to new applications or changes in benefits. The toll-free number is not being answered.

* Nation parks (Campers may be asked to leave depending on how long the shut down continues)

* Smithsonian Museum

* National monuments

* Veteran’s services offices

* National Zoo in Washington (staffed for animal care only) * Federal hunting and fishing refuges operated by the U.S. Fish and Wildlife Service.

* Federal Housing Administration

Compiled by D’JAMILA SALEM / Los Angeles Times