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Panetta: Gop Budget Headed For Veto As Votes Nears, Clinton’s Chief Of Staff Says Republicans Must Make Compromises

Mon., Oct. 23, 1995, midnight

The Republican plan to re-define the shape of government, due for votes in both the House and Senate this week, is “dead on arrival” because of a certain presidential veto, White House Chief of Staff Leon Panetta said Sunday.

Panetta, speaking on ABC’s “This Week With David Brinkley,” also said House Speaker Newt Gingrich and Senate Republican leader Bob Dole will have to make concessions if they want to move their agenda forward. “The speaker of the House and Bob Dole cannot afford to have chaos in this country,” he said.

Beginning Wednesday in the Senate and Thursday in the House, Republicans are going to move toward passage their massive package of spending and tax cuts designed to balanced the budget by 2002.

GOP leaders say that it is President Clinton who is going to have to bend, and have warned that they will reject any long-term extension of the federal debt ceiling, an action that could cause the government to default on its debts, if Clinton does not sign their bill.

“At the end of the day he has to sign it because we now have a solid plan,” the House Budget Committee chairman, Rep. John Kasich, R-Ohio, said earlier on ABC.

In Las Vegas, Gingrich said that Republicans would not back away from their plan to balance the budget in seven years, their package of $245 billion in tax breaks or their plan to trim $270 billion from projected Medicare spending increases.

“For ten months, we have kept our word every day on every major vote and we are going to continue to keep our word,” Gingrich said in a speech to the Western States Republican Leadership Conference.

Republicans have indicated they will agree to a short-term extension of the debt ceiling to avoid a crisis in mid-November when the Treasury must make interest payments putting it above the current $4.9 trillion ceiling.

Kasich played down the possibility of financial collapse if Republicans refuse to make further extensions. “Frankly, they can manage very well with cash flow,” he said.

But Panetta warned of dire consequences. “They’ll let the country go to hell, and basically default on its debt,” he said. “Do not put a gun at the head of the American people and say that if you do not buy our priorities, we are going to shut down the government.”

Both Kasich and Panetta urged the other side to join in negotiations to avert a crisis, but both also placed the burden of compromise on the other.

Kasich questioned the validity of administration numbers in its plan to balance the budget and Panetta said Republicans will have to “back away” from their plan to reduce the growth in Medicare spending by $270 billion and Medicaid by $180 billion, enact a $245 billion tax cut and cut education programs.

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