Republicans Win Early Budget Battles : Government: Climactic struggle over balanced spending plan looms. But President has already signed bills cutting money for several activities.

President Clinton and his lieutenants are brandishing their weapons for what is billed as the climactic battle over government policy, the struggle that begins this week over the Republican bill aimed at balancing the budget in seven years.

But for substantial parts of the government, the budget battle is already over--and the Republicans have won.

Over the last two weeks, Clinton has quietly acceded to Republican demands and signed spending bills that would make big cuts in mass transit subsidies, slash funding for the government’s tax collectors, begin pulling the plug on federal aid to Amtrak and otherwise scale back the size and scope of federal activities.

Major battles remain to be fought over the budget-balancing bill, including those over Medicare, welfare and other programs at the core of the two parties’ disagreement over the appropriate role of government.

In the meantime, however, Congress has passed and Clinton has signed six spending bills for federal agencies--including the Agriculture, Transportation and Treasury departments--that have a major presence in the lives of middle-class citizens.

Clinton won some important concessions before signing those appropriations bills. But he had to swallow other provisions he disliked rather than cast vetoes over issues that lack political punch.

“We’ve had successes and we’ve had losses,” conceded one Clinton Administration official. For example, the same agriculture appropriations bill that provided a significant increase for a nutrition program Clinton favored came saddled with a 10% cut in rural development aid, which the Administration opposed. “We’re not happy about it, but he signed it,” the Administration official said.

The horse-trading is likely to get more intense in the coming weeks as Congress and the White House try to reach agreement on the remaining seven appropriations bills, which include funding for education, health and environmental programs over which the parties are deeply divided.

By contrast, the spending bills Clinton has signed cover agencies and programs that traditionally have enjoyed bipartisan support--in part because the budgets for energy, transportation and agriculture, among others, are usually larded with local projects that help members of both parties. This year’s versions are no exception.

But even in these relatively non-controversial budgets, the Republican drive to scale back the reach and cost of government has forced Clinton to make some tough choices.

He swallowed hard to sign a transportation appropriations bill that would carry out a major shift in priorities that Republicans have favored. The bill would increase funding for highway construction while imposing a 44% cut--from $710 million to $400 million this fiscal year--in federal aid to operate mass transit systems around the country. That is a politically appealing shift for most Republicans because big cities that depend heavily on mass transit are represented mostly by Democrats.

“I come from a rural area where mass transit is a John Deere tractor with a hay rack,” said Rep. Jim Ross Lightfoot (R-Iowa).

The Administration bitterly opposed the cuts in mass transit spending, saying they would force cities to reduce services and raise fares--especially in Sun Belt cities that tend to be more dependent on federal money than cities in the Northeast where transit systems are older and more established. But even in New York City, Administration officials predicted, fares could increase by 5 to 10 cents.

“A dime may not mean much to a congressman in Washington,” said Transportation Secretary Federico Pena in a speech earlier this year. “But to a husband or a wife who takes the train through two zones . . . that comes to $200 annually. Thirty percent of transit riders have incomes below the poverty line. How on earth are they going to pay for $200 increases?”

Republicans argue that the federal government should focus its transit assistance on capital investments and leave it to state and local authorities to pay to operate their systems. Indeed, the same bill that cut operating subsidies for mass transit included $85 million for the construction of Los Angeles’ Metro Rail system.

The transportation bill would also cut operating subsidies for Amtrak, the national rail passenger line, by about 25%. Amtrak officials say they expect to absorb that reduction without trimming services--but only if Congress soon passes legislation that would allow them to cut labor costs and find new sources of revenue.

If that legislation is not passed, the railroad may have to take other cost-saving steps, such as cutting back daily service along some routes to triweekly service, said Tim Gillespie, Amtrak’s vice president for government relations.

In another arena, Clinton signed a Treasury Department appropriations bill that would significantly cut funds for the Internal Revenue Service, including $300 million from the tax law enforcement budget, which had been about $4.4 billion last year.

Frank Keith, an IRS spokesman, said the cutbacks could mean that taxpayers would have to wait longer to get an IRS adviser on the phone to answer questions and that fewer taxpayers would be audited. He estimated that the agency’s overall staffing would drop from 114,000 to 106,000.

“I don’t think we will see any change in processing of tax returns,” Keith said. Administration officials complained that the cut could actually increase the federal budget deficit because scaling back tax law enforcement would reduce revenue collections by as much as $15 billion annually. Republicans dismissed that argument as crying wolf.

“Those figures are pretty subjective,” said Lightfoot, chairman of the House subcommittee that wrote the bill. “They are not happy with it, but they are still going to be able to function and live with it.”

The same bill includes anti-abortion language that the Administration opposed--a provision barring women who are covered by the taxpayer-financed health plan for federal employees from having abortions paid for by that plan, except in cases of rape or incest.

Despite complaints about the IRS budget and abortion funding, Clinton signed the bill after Republicans made some important concessions. The GOP backed down from a provision Clinton opposed that would have imposed new limits on lobbying by nonprofit groups that receive federal funds. And the abortion limits were less stringent than the House had originally proposed.