Clinton, GOP Near Agreement on Plan to Avert Default

After months of budget brinkmanship that had the government teetering on the edge of insolvency, the White House and congressional Republicans are nearing agreement on a long-term plan to keep the government from defaulting--and simultaneously enacting three important pieces of the GOP legislative agenda.

White House officials indicated that President Clinton generally agrees with the three Republican measures, which would give the president line-item veto power, permit Social Security beneficiaries to keep more of their outside earnings and ease the government’s regulatory burden on small businesses.

The president “agreed that those are the three items that need to get done,” said White House Press Secretary Mike McCurry.

If Congress passes and Clinton signs the measure, it would give the GOP some important legislative accomplishments. Indeed, the line-item veto alone would be a historic change in the balance of power between the White House and Congress. But these measures would amount to but a pale shadow of the bold ambitions Republicans flaunted last year when they insisted that they would never pass a long-term increase in the debt ceiling unless Clinton agreed to a plan to cut taxes, reform welfare and bail out Medicare while balancing the budget in seven years.

But now, after many months of trench warfare over the budget, House and Senate Republican leaders acknowledged that a budget-balancing agreement does not seem likely. They announced Wednesday their plans for moving legislation next week to extend the government’s authority to borrow. Although the precise length of the extension has not been settled, aides said that it probably would be at least until mid-1997. To salvage parts of their legislative agenda, Republicans have chosen to festoon the debt limit with the three issues that they think Clinton is most likely to sign into law.

They unveiled their plans after a meeting with Clinton to discuss the upcoming legislative agenda. It marked the first meeting between Clinton and Senate Majority Leader Bob Dole (R-Kan.) since Dole cinched his party’s presidential nomination. Dole has returned to the Capitol from the campaign trail eager to showcase his skills at producing legislation--and to draw distinctions between himself and Clinton.

“I’m happy to be back working,” Dole said at a news conference.

GOP leaders told Clinton that they plan to act before the end of this month on an omnibus appropriations bill to keep the government running for the rest of this fiscal year--a contentious spending bill that will be the subject of heated negotiations between the White House and Congress for the next week. They also plan to vote on farm legislation, aid to Israel for combating terrorism and legislation that would repeal the ban on assault weapons.

But many House Republicans were angered by their leadership’s surprise decision to vote Friday on a controversial measure to repeal the assault-weapons provisions of the 1994 anticrime bill. Some Republican representatives argued that the contentious issue distracts attention from the primary issues of the day--the economy and welfare reform.

After Congress returns in April from an Easter recess, it plans to take another stab at passing a balanced-budget plan--or a more limited bill to overhaul welfare and Medicaid.

Congressional leaders plan to move the debt-limit increase next week because the U.S. Treasury is expected to bump up against the current debt ceiling on March 29, putting the government at risk of defaulting on its obligations.

The line-item veto, Social Security changes and regulatory reform bill all already have come before Congress in some form and are part of the “contract with America”--the 10-point conservative manifesto that has guided the GOP since it took control of Congress in the 1994 elections.

The Social Security rider would raise the limit on the amount of outside income that the elderly would be permitted to collect without having Social Security benefits reduced. Under current law, senior citizens between the ages of 65 and 69 who earn more than $11,280 a year have their Social Security benefits reduced by $1 for every $3 they collect in wages. Republicans have proposed gradually increasing the earnings limit to $30,000 by 2002.

The regulatory reform bill, which passed the Senate, 100 to 0, Tuesday is narrowly targeted at easing the burden of federal rules on small businesses. It would require agencies to consider the adverse impact of proposed rules on small businesses and give small businesses new power to mount court challenges to rules.

Times staff writer Elizabeth Shogren contributed to this story.