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Budget talks quickly collapse

Government lurches into 2nd partial shutdown

Partial Shutdown

December 15, 1995
Web posted at: 11:30 p.m. EST

WASHINGTON (CNN) -- Budget negotiations between the White House and the GOP flopped Friday as neither side seemed willing to compromise, and Republicans refused to avert another partial government shutdown. The result: portions of government including the EPA, national parks and museums were set to close at midnight.


Republicans and the White House spent the better part of the day smearing and blaming each other, unable to pass even a temporary spending bill to allow the government to fully function while the two sides thrashed out an agreement.

Talks were slated to continue over the weekend. If the two sides do not concur on passing a spending bill by Monday, the disruption will be widespread: 280,000 federal employees will be furloughed and at least nine agencies whose spending authority expires Friday at midnight will be closed. Those agencies include:

The shutdown will be less severe than last month's because some spending bills have been signed into law since November, when 800,000 federal workers were furloughed.

"It is wrong -- it is simply wrong -- for the Congressional Republicans to insist that I make deep cuts in Medicaid and Medicare simply to talk."

-- Bill Clinton

Addressing reporters shortly after talks collapsed, President Clinton urged the GOP to pass a continuing resolution which would allow the government operations to continue while both sides discussed the budget. But House Republicans said there would be not such resolution passed Friday, making a partial shutdown inevitable.

President Clinton

Clinton accused Republicans of trying to use the threat of the shutdown to force him to accept "deep and unconscionable" cuts in Medicare and Medicaid. "It is wrong -- it is simply wrong -- for the Congressional Republicans to insist that I make deep cuts in Medicaid and Medicare simply to talk," Clinton said.

Clinton said he also disagrees with tax cuts proposed by the Republicans, which he said would benefit only the wealthy and special interest groups. "But I did not require them to drop those provisions as a condition of just talking," Clinton said. "But they wanted us to agree to big cuts in Medicare and Medicaid simply to talk." (247K AIFF sound or 247K WAV sound)

The president said he has made "good faith efforts" and "sought reasonable discussions and honest compromise" in the balanced-budget talks. (213K AIFF sound or 213K WAV sound)

GOP leaders accuse Democrats of deception


Senate Budget Chairman Pete Domenici argued that Clinton and other Democrats don't really want to balance the budget within seven years -- a pivotal GOP demand. "They just want to use optimistic, rosy economics and cook the books," Domenici said. (332K AIFF sound or 332K WAV sound)

John Kasich

House Budget Committee Chairman John Kasich said Democrats

"Tell the American people the truth," Senate Majority Leader Bob Dole shot back to Clinton. "Don't come on television, Mr. President, and say we're devastating this and devastating that when it comes to key programs." (179K AIFF sound or 179K WAV sound)

were beholden to the liberals in their own party. "In order to get this deal done, they're going to have to throw the far left from the train," he said. (77K AIFF sound or 77K WAV sound)

"Tell the American people the truth. Don't come on television, Mr. President, and say we're devastating this and devastating that when it comes to key programs."

-- Senate Majority Leader Bob Dole

The rapid break off in talks was unexpected. Both sides had earlier said progress might finally be possible, and that they were ready for marathon talks through the weekend.

Each side came armed with a proposal -- but the two sides were so suspicious of one another they decided to ask Budget Director Alice Rivlin to flip a coin to see whether the White House or Republicans would go first.

The two sides then quibbled over the results of the coin toss. Finally, they presented their proposals to each other at the same time.

What the proposals hold

The White House moved $121 billion closer to a balanced budget than in its most recent previous offer last week. Included was a recommendation to scale back Clinton's tax cut and close billions of dollars in corporate tax loopholes. But the bulk of the savings came from using more optimistic economic assumptions than the ones contained in the Republican budget -- provisions that Republicans trounced as "good old fashioned smoke and mirrors."

For their part, Republicans recommended shaving $5 billion from their tax cuts, and said they would ease the hit on Medicare, Medicaid, education and environmental programs that their earlier measure would have imposed.

After only a few hours of discussions, the two sides decided there was no point in continuing.

Republican sources told CNN there was, once again, an impasse over whose economic forecast to use. The White House said $243 billion dollars can be saved by using its own economic forecast, which are more optimistic than those offered by the Congressional Budget Office.

Leon Panetta

Republicans ended the meeting when a dispute arose over whether White House Chief of Staff Leon Panetta had ever told Republican negotiators he could come up with a balanced budget plan using the CBO analysis. Republicans insisted Panetta had told them he could in a previous budget meeting. Panetta insisted he had not. At that point, Republicans got up and left the meeting.

Republicans argued that the White House plan still falls $75 billion dollars short of balancing, and that more funds from Medicare and Medicaid must be slashed.

After the meetings, Panetta said the White House will not agree to the Republican insistence on more cuts in Medicare and Medicaid. Republicans responded by accusing the White House of failing to come up with a proposal that actually balances the budget.


"They have to try and make us look like the bad guys on Medicare and Medicaid, because they don't have a plan," a Republican negotiator told CNN. "By law the president has committed himself to agreeing to a seven-year balanced budget plan and we are going to hold him to the law."

Clinton has invited a broad range of Democrats Saturday to the White House to try and forge a unified stance.

The first effects of a shutdown would be seen at national parks, national museums and other federal tourist sites Saturday.

Meanwhile, the union representing federal employees is continuing its lawsuit against the government. A hearing is set for Monday morning in the case. The union contends it is illegal to require employees (the ones classified "essential") to work without pay during a shutdown.

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