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Time running out for budget deal

Gingrich threatens to put U.S. in default on debts

September 21, 1995
Web posted at: 12:45 a.m. EDT

WASHINGTON (CNN) -- The White House isn't buying a Republican plan for a makeshift budget that keeps the government from shutting down October 1. Clinton administration officials called the temporary plan a "blackmail" attempt to get the president to accept Republican spending priorities.

Gingrich White House Chief of Staff Leon Panetta said the Republican plan would attempt to cut or take deep chunks out of Clinton's spending priorities, such as education and the environment.

The chasm is wide between the two sides on the issue, but unless a decision is reached, government agencies will be forced to suspend operations when the current budget expires October 1.

House Speaker Newt Gingrich said he's willing to risk the first default on the debt in U.S. history to get the budget he wants. Gingrich told the Public Securities Association that any debt limit legislation must be part of a special budget bill backed by Republicans to make deep cutbacks in entitlements such as Medicare, Medicaid, farm programs and welfare.

On the House floor, Majority Leader Richard Armey said they plan to draft a continuing resolution to extend the debt ceiling for about six weeks, "which should be enough time for everybody."

Traditionally, the Republican proposal accepts the lowest spending amounts proposed by either the House or Senate, item by item. But that means that Clinton will find himself painted into a corner by the Republicans' budget priorities in every program, except for those on the chopping block. And the Republicans would keep those programs at low levels to block anyone from being furloughed until a final deal is settled.

Panetta said the White House would accept the level of savings Republicans are proposing, but wants the reductions spread across the board instead of focused on the Republican agenda.


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