President Vows Veto, Offers Deal Balanced Budget Bill Passes

As the first cracks developed in the deadlock between the White House and Congress that has caused a partial government shutdown, Congress on Friday gave its final approval to mammoth Republican budget legislation to change the course of the U.S. government.

President Clinton said Friday that he would veto the bill. “We should balance the budget in a way that reflects our values,” he said in a statement.

But top White House officials spent the afternoon and evening in the Capitol working with congressional leaders on a way to break the impasse that has kept the government partially closed since Tuesday. An agreement seemed near between the president and his Republican antagonists to continue government spending until sometime next month. But when the meetings broke up about 10 p.m., details still needed to be worked out.

“The bottom line is we’re going to stand firm for a balanced budget over the next seven years,” said Sen. Bob Dole of Kansas, the Republican leader.

But the word at the White House was that it was the Republicans in the House, more zealous than those in the Senate, who were blocking a compromise. Negotiations are expected to continue today.

The House approved the seven-year budget bill, 237-189, essentially following party lines. The measure, the fulfillment of the Republicans’ promise to shrink government and alter its priorities, would eliminate the federal deficit by 2002, cut taxes for many and sharply limit spending on social programs.

The Senate passed the legislation, 52-47. The vote was along party lines, except that Sen. William Cohen, R-Maine, voted against it.

Since Republicans do not hold large enough majorities in Congress to override the veto, the bill will never become law. Still, it is one of the most important pieces of legislation in years.

It lays down the basis for Republicans’ negotiations with the White House, which are expected to begin after Thanksgiving.

“Today is as important a vote as any day since 1933,” said House Speaker Newt Gingrich. “I think this is an enormous accomplishment.”

To some extent, the approval of this monumental legislation was overshadowed by the question of whether Congress and the president could arrange to get the government back to work temporarily.

The issues are integrally entwined. If the president’s veto of the big budget legislation is sustained, he will more or less have his way and the Republicans will have little chance of overhauling Medicare and welfare, cutting a wide range of taxes and putting in place a seven-year plan to balance the budget.

With that in mind, Republicans have insisted on forcing the president’s hand by attaching budget conditions to temporary spending legislation that must be enacted to give the government’s departments and agencies money to operate.

Congress has approved two temporary spending bills, called continuing resolutions, to put the government back in business until next month. The president vetoed the first, leading to this week’s partial government shutdown, and has promised to veto the second.

Clinton refused to accept the condition Republicans attached to the legislation committing him to produce a seven-year balanced-budget plan using a conservative accounting method adopted by Congress.

Such a commitment, the president maintains, would force cuts the country cannot afford in Medicare and programs protecting the poor.

Two of the president’s top assistants - Leon Panetta, his chief of staff, and George Stephanopoulos, his senior adviser - spent several hours in the Capitol on Friday afternoon and evening working with lawmakers on a compromise.

“We believe we can find a way to break the impasse that’s a win-win situation,” Stephanopoulos said.

Sen. John Breaux, D-La., said Friday evening that an agreement was near in which the president would agree to a balanced budget within seven years if “mutually agreeable economic assumptions” were used.

The administration’s economic forecasts, made by the Office of Management and Budget, are more optimistic and thus allow more flexibility than those of the Congressional Budget Office that Republican leaders have been insisting on using.

Republicans in the House were said to have balked at the Breaux prescription on the ground that it would give the president a way to back out of a pledge to put forward a balanced-budget plan.

With an agreement in the wind, the oratory on both sides was distinctly modulated Friday compared with the shootout style of earlier in the week. Perhaps this was because the switchboards at the White House and Congress have been flooded with calls from people saying they are tired of the squabbling.