Budget Talks: A Deal or Nothing at All?

Top-level budget negotiations headed for what could be a make-or-break session today after two hours of talks Monday in this blizzard-stricken city that focused on the latest concessions from congressional Republicans and President Clinton.

Leaders on both sides forecast that today’s negotiating session is likely to bring the longed-for deal--or the final break-off of the months-old maneuvering.

Republicans were considering making a new proposal on so-called entitlement spending that is intended to pressure Clinton into accepting larger cuts. The GOP leaders were planning to tell the president that they want to reach a specified total figure of entitlement savings--more than $300 billion over seven years--but would allow the Administration to choose how the cuts would be divided between the welfare, Medicare and Medicaid programs.

“There’s going to be another effort tomorrow to package entitlement savings and give them a little flexibility on how they want to get to an overall target,” said Rep. John A. Boehner of Ohio, chairman of the GOP conference. “They can split it any way they want.”

The latest Clinton budget calls for $102 billion in savings from Medicare, $52 billion from Medicaid, $45 billion in welfare, an additional $295 billion from other domestic programs and $87 billion in tax cuts.

Senate Majority Leader Bob Dole (R-Kan.) said that negotiators should know by tonight if a deal is possible. White House Press Secretary Mike McCurry said that the talks are “at a point where they’re either going to get an agreement or they’re not. It’s not going to drag on for another number of weeks.”

The GOP leaders are now talking about reducing their Medicare savings over seven years to $168 billion from the $201 billion in their current negotiating position. Savings from Medicaid have been ratcheted down to $85 billion, from $115 billion. Welfare savings would be $60 billion, compared to $84 billion previously.

The Republicans are talking about net tax cuts of between $170 billion and $185 billion, down from an earlier figure of about $200 billion.

The GOP has also said that it is willing to trim its proposed savings from the earned-income tax credit, aimed at the “working poor,” to $15 billion from an earlier $22 billion.

Democratic sources indicated after Monday’s session that the latest GOP proposals do not go far enough toward the White House position but that they saw enough movement by the Republicans to continue the search for common ground. Despite the concessions, both sides remain far apart on dollar figures and underlying principles.

The Republicans believe that Clinton’s savings would not bring fundamental change to the expensive entitlement programs, while Democrats argue that the Republican proposals would violate basic social guarantees to the elderly and disadvantaged.

Rep. John R. Kasich (R-Ohio), the House Budget Committee chairman, declared that the latest GOP figures are “about as close to a final offer as you can get. There is virtually no flexibility left in any of these numbers.”