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Budget negotiations to begin next week

November 24, 1995
Web posted at: 10:25 a.m. EST

Jill Dougherty

From Correspondent Jill Dougherty

WASHINGTON (CNN) -- Refueled with holiday dinners and some time at home, members of Congress and the Clinton administration begin budget negotiations in earnest next week. The December 15 target date -- when the latest temporary spending measure expires -- is looming, and the first volleys have already been fired in what is expected to be a dramatic showdown.

Newt Gingrich

"We'll cooperate with the president but we will not compromise," said House Speaker Newt Gingrich. (48K AIFF sound or 48K WAV sound)

"We've got to start over in some sense," said White House press secretary Mike McCurry. "This reconciliation bill is not going to be acceptable."

Both sides are bound by the agreement that ended the government shutdown earlier this week, but each says that it will stick by its principles. For the Republicans, that's balancing the budget in seven years; and for the White House, it's protecting the president's spending priorities.

Somehow, those two positions must be reconciled. But Laura Tyson, the president's national economic adviser, said the task is so formidable that the mid-December deadline may not be met.

Laura Tyson

"We're hopeful, as we enter negotiations, that we can find such a way, but it will be a very difficult task," said Tyson, a member of the administration's budget negotiation team. (80K AIFF sound or 80K WAV sound)

The difficulties range from deciding what numbers to use in budget projections to just how much and where to cut spending.

Establishing budgetary assumptions -- estimates of how the economy will perform over the next seven years -- may be the easiest task. Both sides have agreed to use a combination of Congressional Budget Office figures, reviewed by the Office of Management and Budget and private experts.

And there could be some "give" on Republican plans to cut education and environmental protection programs. The White House is digging in its heels, but Republican Congressional sources indicated they may be willing to compromise.

But the Earned Income Tax Credit for the working poor is heading for a showdown -- Clinton officials call the Republican plan to cut it a tax increase.

Medicare chart

White House officials say there is room for compromise on Medicare, depending on the size of proposed cuts. But so far, Republican cuts are more than double what the president wants. And Medicaid is a real bone of contention -- Republican cuts are more than three times larger than the administration's.

Both the president and the Republicans want middle class tax cuts, but the president is under pressure from the conservative wing of his own party to jettison them.

The problems are numerous, and some seem insurmountable. Even so, one Democratic strategist says that Clinton should not back down, even if it means not resolving the budget until next year.

"Let's make the 1996 elections about this issue," said political consultant Bob Shrum. "Let's take this issue to the country."

While many politicos see no problem with making the coming elections a referendum on conflicting budget ideas, another factor may temper Clinton's feistiness with Congress. With a peace agreement in Bosnia, the president is set to deploy U.S. troops -- and for that, he needs as much Republican support as he can get.

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