Try our new search engine

Big Hurdles Remain To A Deal In Budget Talks

WASHINGTON (AllPolitics, July 20) -- This week, the White House and Congressional Republicans are slated to sort out their differences on a plan to balance the budget and cut taxes. But a lot of work remains, and new political hurdles block a deal because of deep turmoil within Republican ranks.

House Speaker Newt Gingrich (R-Ga.) last week barely survived a Republican coup attempt, but at considerable cost: Restless conservatives are warning against big compromises in budget negotiations.

"You never know if you could have had a shot at the title if you take a dive in the first round," Rep. Matt Salmon (R-Ariz.) told ABC News. "I'm sick and tired of taking a dive in the first round."

This was supposed to be the final round in the budget talks. But big differences remain. President Bill Clinton and Senate Republicans support making affluent senior citizens pay more for Medicare. But House Republicans think otherwise.

The White House and Senate also agree on a 20-cent per pack hike in the cigarette tax. But Rep. Bill Archer (R-Texas) said on ABC's "This Week" that "many, many of our members are just adamantly opposed to it, and it's going to be a difficult issue for us."

Then there's the fight over whether people who earn $18,000 to $28,000 a year are entitled to a proposed $500 per child tax credit.

Most Republicans say no, arguing that these families pay little or not federal taxes and thus the credit amounts to welfare. Low-income taxpayers have been granted tax relief four times in the past decade, they note.

"We're going to look awfully stupid if we give income tax relief to people who do not pay income taxes," Rep. Joe Scarborough (R-Fla.) said on CNN's "Late Edition."

The White House sees a political winner in this debate. "If nurses, teachers, police officers and farmers don't get the child credit I don't see that the president could agree," White House Budget Director Franklin Raines said.

With conservatives prodding Gingrich to stand firm, Clinton released a letter urging Republicans to join him in supporting a mainstream, bipartisan tax bill.

"When they had difficulties they've had a tendency to lurch to the right and out of the mainstream, and we hope that doesn't happen this time," Raines said.

What's next is unclear. At least one more Gingrich deputy could lose his leadership spot. And sources say Gingrich is promising to reassert himself and rally the rank and file.

"Right now we should all put our guns away and allow Newt and the leadership to negotiate with the president," Rep. Peter King (R.-N.Y.) said.

Congressional Democrats believe the internal GOP chaos gives them more leverage in the budget debate. Yet they're nervous. They fear Clinton is so eager for a deal he will reach out to Gingrich in hopes of a quick compromise.