Pressure Builds for Compromise on Budget Clash

Stalled talks on the federal budget impasse got new life late Friday amid rising pressure for the White House and congressional Republicans to resolve the 4-day-old federal shutdown before the Thanksgiving vacation.

After a day of intermittent talks, the White House and GOP officials were considering proposals for a stopgap spending bill that called for balancing the budget within seven years but did not spell out in specific detail how that goal would be achieved. A disagreement over that point brought a partial shutdown of federal services on Tuesday, when officials furloughed 800,000 workers, about 40% of the nonmilitary federal work force.

White House Chief of Staff Leon E. Panetta met with the Republican chairmen of the House and Senate budget committees Friday evening. The talks ended without an agreement, but conversations were expected to continue. However, the timing of talks was unclear.

House Budget Committee Chairman John R. Kasich (R-Ohio) said after the talks that “the Administration’s offer is not acceptable.”

But Panetta said the talks will continue.

“They are talking about goals, time frames and a lot of ambiguous language,” said Senate Majority Leader Bob Dole (R-Kan.). “We’ll just have to look at it. It’s going to take a while.”

Earlier in the evening White House Press Secretary Mike McCurry told reporters, “We’ve got some language that we feel should be acceptable to both sides.” But Tony Blankley, press secretary to House Speaker Newt Gingrich (R-Ga.), was less optimistic, saying Panetta’s first proposal “was not going to get agreement. Conversations are continuing.”

The huge Republican-designed budget bill passed the Senate on a 52 to 47 vote Friday night, but a minor change in the legislation will send it back to the House for a vote today. As the Senate acted, moderates on both sides were beginning to view the weeklong battle over the temporary spending issue as an embarrassment that offered scant gain to anyone, preventing a resolution to the larger budgetary issues.

One proposal under discussion for a temporary funding bill tried to finesse the arguments over what kind of economic assumptions should be used as the basis for a budget-balancing bill. Such assumptions have great influence on how deep the budget cuts need to be.

The proposal stipulates that the sides agree to balance the budget in a seven-year timetable, based on “mutually acceptable economic assumptions.” Such language would allow both sides to claim they had lived up to their stated convictions. If adopted, it would get the government operating again while the debate moved on to the larger arena of negotiations over the final, so-called reconciliation bill.

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Sen. John B. Breaux of Louisiana, a conservative Democrat who advocates this proposal, said both sides appeared to be embracing it.

Both sides, he said, “have come to the realization that there’s no more gain” to be had. Any more delay in resuming federal operations and “the American people will just get confused and say a pox on both of us,” he said.

Officials said Thanksgiving week has raised pressures because members don’t want to go home to face angry constituents. And a long delay will threaten the benefit checks that the Department of Veterans Affairs is due to send on Tuesday to 3.3 million veterans and survivors.

One senior Democratic aide contended that a number of top Republican leaders, including Dole and Senate Budget Committee Chairman Sen. Pete V. Domenici (R-N.M.), had come to believe that it was time to move on from the fight over the temporary spending bill. “Only the Speaker is holding out,” he said, referring to Gingrich.

President Clinton had been due to get the new temporary spending legislation that passed the Senate Thursday night, and cleared the House the evening before. Clinton was expected to veto the measure because of his view that its call for a seven-year timetable to eliminate the deficit, using conservative economic assumptions, would jeopardize badly needed government services.

But staff members were saying the bill was not being sent to the White House on Friday because of rising momentum for a compromise.

In the Senate and House, small groups of Democrats and Republicans huddled in numerous meetings throughout the day to try to come up with compromises to end the government shutdown.

A group of 40 Republicans and 39 Democrats signed a letter proposing a spending bill that would embrace a seven-year timetable for balancing the budget, but “without any preconditions.” The proposal also would say that the budget “should” rather than “must” be based on Congressional Budget Office economic projections, on which Republicans have insisted.

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“There is a great deal of support in the Democratic caucus for us to reach an agreement,” said Rep. Tim Roemer (D-Ind.), the chief Democratic sponsor.

Rep. Fred Upton (R-Mich.) said it would “allow both sides to save a little face.”

“Our letter is serving as the icebreaker to break the logjam,” Upton said late Friday. “There seems to be movement again. People are talking to each other on both sides of the Capitol.”

Meanwhile, the Appropriations Committee was busy drafting a scaled-back continuing resolution that would provide funding to resume some government services, including processing applications for Social Security and Medicare benefits and veterans pensions. This is expected to be put to a vote on Monday.

And U.S. District Court Judge Emmet Sullivan rejected a federal union’s motion that he bar the government from requiring employees to work without assured pay during the shutdown. The order was sought by the American Federation of Government Employees, the largest federal union.

The Justice Department argued that the precedent for the furloughs was well established, and that the government has repaid workers in all previous cases. The Republican leadership has promised to fully compensate all federal workers.