Clinton Submits Budget Proposal; Shutdown Ends

In a concession that reopens the federal government for three weeks, President Clinton on Saturday met a Republican demand for him to submit a new balanced-budget plan based on Congress’ own financial projections.

Clinton’s action triggers legislation approved by Congress late Friday to completely fund government operations through Jan. 26, marking the first time since Dec. 16 that the entire federal apparatus will be operating normally.

Congress and the president had agreed less than 24 hours earlier to reopen many but not all of the shuttered offices. At the same time, congressional Republicans laid down their offer to open the entire government if Clinton produced a plan to balance the budget by the year 2002, using congressional financial estimates.

The White House said Saturday night that Clinton had signed off on a Senate Democratic budget plan that reaches balance in 2002 but offers less in the way of tax cuts and more domestic spending than Republicans have demanded.

“I am pleased that Congress has completed the task of reopening the federal government,” Clinton told reporters in the Oval Office after they watched him sign the measure in front of television cameras.

White House senior advisor George Stephanopoulos said the new plan “clearly shows that you can balance the budget in seven years . . . without deep cuts in Medicare, Medicaid, education and the environment--if you don’t have a huge tax cut for the wealthy.”

The Democratic plan was certified late Saturday by the Congressional Budget Office to achieve a $1-billion surplus in 2002, Stephanopoulos said.

While CBO’s acceptance of the basic arithmetic met a critical Republican budget demand, GOP leaders were acutely aware that the White House was embracing a plan that casts the two sides’ opposing positions in sharp relief.

The Democratic budget outline, for example, would seek to save $102 billion in Medicare costs, compared with the Republicans’ latest proposal of $168 billion. It features an $87-billion tax cut, targeted at the middle class and moderate-income workers, compared with the GOP proposal of $240 billion in tax cuts.

And the White House would seek to gain $60 billion by cutting corporate tax loopholes, much more than the amount sought by Republicans.

Republicans quickly criticized the policies inherent in Clinton’s budget submission, complaining that it would not do enough to overhaul Medicare, welfare and other social programs.

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“Of all the budgets presented, this is the most liberal of all,” said Senate Budget Committee Chairman Pete V. Domenici (R-N.M.).

Nonetheless, Republicans were intrigued by the administration’s effort to stir the tortuous and frustrating negotiations, which have repeatedly bogged down, raising doubts that a sweeping compromise is even possible. The new White House plan would achieve a total of $605 billion in savings by 2002, compared with just $385 billion from the previous White House proposal.

“At least we’re going to have a document on the table” that Republicans can evaluate, said House Budget Committee Chairman John R. Kasich (R-Ohio).

Word of the White House plan spread on a day of conciliation on the budget, as national parks, museums and other facilities reopened after Friday’s deal to ease the 21-day shutdown of many federal services.

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The Washington Monument, Lincoln Memorial, Smithsonian Institution and other museums opened by noon EST. Other government facilities, also hit by the shutdown, were struggling to catch up.

In Colorado, rangers began to remove barricades at Rocky Mountain National Park, but deep snow impeded their efforts. “Since we won’t have everything at 100% this Saturday, we ask for the public’s understanding and patience during this reopening phase,” said park Supt. A. Durand Jones.

“Now we work for pay rather than work without pay,” said spokeswoman Joanne Carney of the Veterans Administration Medical Center in Northampton, Mass.

However, while employees in Washington breathed sighs of relief at the prospect of finally returning to work, another ominous development seemed destined to keep them at home again Monday. A huge storm is forecast for Washington today, threatening to dump enough snow to force closure of many offices.

Even as federal workers began to pick up the pieces left by the shutdown, budget negotiators were struggling to move forward with their arduous negotiations.

In one bid at compromise, the new Clinton plan offers a contingency feature: If the economy performs as well as the White House Office of Management and Budget projects, this would trigger an additional $194 billion in savings. And the potential windfall would be parceled out with an eye to compromise: a third for domestic programs, a third to cut taxes and a third for extra debt-reduction.

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For their part, Republicans offered a concession in Medicare by accepting the proposal of at least 50 moderate and conservative Democrats to curb Medicare growth by $168 billion rather than $201 billion, as the GOP previously has demanded. The two sides remain far apart on the issue, however.

Some budget observers figured that Republicans would compensate for their decision to seek $33 billion less in Medicare savings by proposing a tax cut of less than $240 billion. But one GOP source denied it.

“It’s not like they cut the tax cut by $33 billion, although some people will try to say that,” the source said.

Earlier Saturday, Republicans expressed skepticism that the two sides would succeed in bridging their substantial differences on the budget. At a presidential campaign stop in Iowa, Senate Majority Leader Bob Dole (R-Kan.) pegged the odds of a budget deal at “50-50.” Shortly afterward, Dole flew back to Washington to attend negotiations.

Kasich also pointed to a lack of progress in the negotiations.

“As of right now, I do not believe that we’ve made very significant progress towards reaching any kind of an agreement based on the major issues,” he said on CNN’s “Evans & Novak.” “I have not seen any evidence of it so far. I’m always optimistic that today might be the day, and that’s why I think we ought to keep talking.

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But the White House struck a more upbeat note early on. In his weekly radio address, Clinton said it was “decision time” on balancing the budget, and he called on Republican leaders to join him in shaping a “national unity” budget plan.

While the budget debate has been difficult, long, raucous and “not always pretty,” Clinton said, the time has now arrived to take “the best that each side has to offer and fashion a sensible solution.”

Dole, responding for the GOP, contended that Clinton had failed to keep his promise to offer a seven-year balanced budget that would pass muster with the CBO, a charge that Clinton eliminated later in the day.

Seeking to drive a wedge between Clinton and the Democratic Party, Dole appealed to conservative Democrats to help get the budget balanced if the president failed to deliver. “I hope that in the days ahead, we can put partisan politics aside and reach an agreement . . . . But if the president won’t agree to balance the budget, Republicans will welcome support from Democrats who share our determination.”

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Even before the White House decision Saturday to put forth a balanced budget, 280,000 furloughed federal employees were scheduled to return to work under a measure passed by Congress Friday and signed by Clinton early Saturday. Those employees, and 480,000 others who have worked without pay since the shutdown began Dec. 16, will receive full current and retroactive wages.

However, the measure guarantees wages only through Jan. 26, a state of affairs that is unchanged by the new development. House Republicans sought the time limit in order to exert pressure on the White House to compromise on a seven-year budget plan.

In a statement early Saturday, the White House press office said Clinton considered the back-to-work measure “a step in the right direction, but more work remains to be done.”

The budget has become an inflammatory issue whose developments reverberate instantly on the presidential campaign trail.

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Sen. Phil Gramm (R-Texas), who is a rival of Dole’s for the GOP presidential nomination, said Saturday that by taking a moderate approach on the shutdown, Dole has given up leverage to Clinton.

“I don’t think there is any doubt about the fact that Bob Dole lost his nerve,” Gramm said at a campaign rally in West Des Moines, Iowa. “We gave Bill Clinton another credit card.”

Among some of the people affected by the shutdown, movement toward compromise was greeted with a mixture of optimism and skepticism.

Melodie Kozee, a Social Security employee in Kansas City, was anxious that the measure bringing the workers back provides pay only through Jan. 26. “Wonderful,” she said, “except it only lasts until the end of the month, and we’ll be back where we started.”

Times wire services contributed to this story.