Clinton Aides Favor Budget Stalemate : Deficit: Some argue that the President would be better off taking the issues to the people during ’96 election. GOP attacks ‘strategy of failure.’

In public, Republican and Democratic budget negotiators are engaging in a familiar duel over the federal budget, each blaming the other for breaking off negotiations aimed at eliminating the deficit within seven years.

Yet in the privacy of their White House offices, where the senior staff plots President Clinton’s budget strategy, some aides are pressing the argument that the President would be better off without an agreement to balance the budget.

When the talks began on Tuesday, negotiators vowed to meet six days a week, resting only on Sundays. That resolve lasted exactly three days. Talks were suspended as of Friday and are not scheduled to resume until Tuesday.

With polls showing considerable public opposition to Republican-sponsored budget cuts, particularly in Medicare, some White House aides said the President could come out ahead by forcing a stalemate and letting the 1996 elections decide the underlying issues of the federal government’s role in American life.

In part, this argument may be a tactical ploy designed to wring concessions from congressional Republicans by threatening them with gridlock. But even some GOP aides acknowledged in private that the Republicans need a long-term deal more than the Democrats.

This view is based on a calculation that while Clinton would lose some points with the public for failing to bring about a budget compromise, Republicans would lose still more because of their high-profile vow to cut entitlement spending and balance the budget by the year 2002.

“There’s no question that it’s better to stand firm for these principles and take the deal to the country, than to come up with a deal that we think is bad for people,” one senior White House aide said.

Presidents are always in the strongest political position if they can show that they have gotten things done. But Clinton could argue that he had done his job--and proved himself a moderating force--by blocking sweeping GOP-crafted changes that the White House believes a majority of Americans now clearly oppose.

Many moderate-to-liberal Democrats in Congress have been strongly urging Clinton to accept no compromise on the budget reconciliation measure, and to fight it out at the ballot box. “Let the American people decide,” Sen. Bob Graham (D-Fla.) argued this week.

GOP leaders, eager to paint Clinton as an enemy of a balanced budget, claimed that the White House is dragging its feet, proving that the President has already decided to block any deal.

Negotiations over the budget bill broke up late Thursday with Republicans charging that the White House had not come forward with the alternative plan needed to get serious negotiations under way. The White House countered with its own arguments that the GOP leadership was ignoring a previously agreed upon agenda for the talks.

“It is clear that what they are pursuing is a strategy of failure,” said Ed Gillespie, a spokesman for House Majority Leader Dick Armey (R-Tex.). “They think it is in their best political interest that we don’t get to a balanced budget.”

In response, senior presidential adviser George Stephanopoulos said the Republicans “aren’t ready to negotiate. . . . They had a strategy today to come in and blow it up.”

The White House knows that Clinton runs the risk of looking like an enemy of the popular goal of balancing the budget if he is clearly standing in the way of a deal. In the last week, goaded by Clinton political adviser Dick Morris, some aides and advisers have toned down statements suggesting that the White House was ready to accept a stalemate. Now all are insisting that their top goal is an acceptable bill.

While the White House has a tactical advantage on the reconciliation bill, its position is far weaker on the six spending bills that have yet to become law.

The Republicans may have enough support for the spending bills to override presidential vetoes. If some of those bills are not approved, some government agencies will have their funding set by a temporary spending measure that could enable Republicans to force sharp cutbacks in their operations.

“It would be ideal for us if we could finish off all the appropriations and then have no deal on reconciliation,” one Clinton aide said. “Then you’d have your election issue and everything else would stay as current law.”

But House Speaker Newt Gingrich (R-Ga.) has been insisting that any deal must involve both the reconciliation issues and the remaining appropriations bills.

Rep. Bob Livingston (R-La.), chairman of the House Appropriations Committee, said Friday that Clinton’s position on the appropriations bills had weakened Thursday when he agreed to allow this year’s defense appropriations measure to become law. The $243-billion measure included spending that Clinton opposed and therefore could have used to bargain for his priorities in other appropriations bills.

“The balance of power here has somewhat shifted,” Livingston said.

The alternative to a final blowout over the budget, of course, is a brokered deal. And some analysts said Friday that it may be clear as soon as Monday whether that is still possible.

On that day, the Congressional Budget Office is expected to decide whether to adjust the estimates of economic growth and government spending that will be the basis for the balanced-budget plan.

If the agency goes for a more optimistic scenario--as some analysts believe it should--it could ease spending constraints by more than $125 billion over the seven years of the spending plan. And that could become the basis of a compromise that would allow both sides to preserve their priorities.