New Forecast May Aid Budget Talks : Government: Congressional Budget Office reportedly to include extra $100 billion. GOP’s Kasich sees hope for cooperation as next spending plan deadline approaches.

With another deadline approaching in the partisan battle over the federal budget, a leading congressional Republican indicated Sunday that a new, more optimistic forecast of the nation’s economy will bring the two sides closer to agreement.

“The economy’s gotten a little bit better,” said House Budget Committee Chairman John R. Kasich (R-Ohio). “We’ll have a few extra dollars to spend.”

Appearing on the CBS-TV program “Face the Nation,” Kasich suggested that the new view of the economy will be reflected when the revised forecast of the Congressional Budget Office is made public this week.

Kasich did not identify how much extra money might be available or where it might be placed but said, “We’ll be able to make some improvements in the [spending] plan that we currently have.”

However, sources told The Times that the new CBO projection will provide more than $100 billion to help close the gap between GOP leaders and the White House over a seven-year balanced-budget proposal.

The congressional Republicans’ standing proposal aims to balance the federal budget by 2002 through spending restraints of $900 billion. Their largest reductions--$270 billion--would come from reining in the growth in Medicare, the national health program for Americans age 65 and older. President Clinton has proposed balancing the budget by trimming $465 billion over seven years.

The CBO’s forecast and its underlying assumptions have been a matter of intense dispute between the congressional Republicans and the president. On Friday, a temporary spending agreement expires. If the two sides do not agree on at least another short-term spending plan, it could force a repeat of last month’s shutdown of some government operations.

The president has frustrated the Republicans by breaking his earlier pledges to rely on the data produced by the CBO. In practice, Clinton has done what Democrats criticized Republican Presidents George Bush and Ronald Reagan for: use the prognostications of the administration’s own Office of Management and Budget. The OMB’s economic assumptions concerning economic growth, interest rates and other variables were generally more optimistic than the CBO’s under Bush and Reagan.

Speaking for the administration, Vice President Al Gore said Sunday that Clinton has chosen not to rely on the CBO because the predictions of the OMB are more reliable.

“The CBO numbers, by contrast, have been proven to be wrong,” Gore said. “. . . They’re in the process right now of correcting the mistakes from the last time.”

Gore noted that Clinton first pledged to rely on the CBO in February 1993--nearly two years before Republicans won control of Congress.

“What’s happened in the last three years?” asked the vice president. “. . . The Republicans have changed the people at CBO.”

Appearing on NBC-TV’s “Meet the Press,” Gore sought to frame the budget dispute as a battle between a compassionate president and Republicans in Congress who are eager to gut Medicare.

“The difference is whether you’re committed to saving Medicare or not,” Gore said. “. . . They don’t believe in Medicare. They voted against it when it was established. They have always been opposed to it. And now they want it to wither on the vine.”

Calling it “unconscionable . . . and wrong,” Clinton criticized the extent to which the Republicans would restrain the growth of spending in Medicare and Medicaid, the federal health program for indigent and disabled Americans.

As for resolving the budget standoff, Clinton told Florida Democrats in a closed-circuit TV address that “we ought to be able to agree on one thing: Nobody--nobody--should threaten to shut the government down right before Christmas.”

Later in the day, House Majority Leader Dick Armey (R-Texas) told CNN’s “Late Edition” that the president “understands we have new CBO scoring that will reach out a little latitude.”

Kasich urged the president to negotiate and said delay will squander a historic opportunity.

Times staff writer Janet Hook contributed to this story.