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Record-breaking federal shutdown ends


Clinton meets key GOP demand
with latest budget proposal

January 6, 1996
Web posted at: 11:55 p.m. EST

WASHINGTON (CNN) -- The longest federal government shutdown in U.S. history is over.

Clinton signing

President Clinton cleared the way for a complete lifting of the 22-day partial shutdown Saturday by bowing to a key Republican demand: submitting a seven-year balanced budget plan scored by the Congressional Budget Office. (204K AIFF sound or 204K WAV sound)

A continuing resolution that would permit the full re-opening of the government was then signed into law by Clinton. The temporary spending measure is good through January 26, giving negotiators 19 days to settle on a final budget.

The Republican-led Congress approved the legislation Friday, which provided for the reopening of all closed agencies and departments of government, but only if Clinton presented a balanced-budget plan scored by Congressional economic numbers.

Some Republicans said the plan contained too much spending and actually increased taxes, but Republicans conceded it would eliminate all deficits over seven years using figures provided by the CBO. Throughout the previous negotiations, Clinton had resisted using CBO forecasts, saying they were too pessimistic.

Graphic (left)Graphic (right)

GOP lawmakers seemed to appreciate Clinton's concession. "The good news is that at least we're going to have a document on the table that Republicans can evaluate," said House Budget Chairman John Kasich, R-Ohio. (246K AIFF sound or 246K WAV sound)

'The most liberal of all'

Senate Budget Committee Chairman Pete Domenici, R-New Mexico, said Clinton's latest budget was "the most liberal of all," but said it might "move them forward." (391K AIFF sound or 391K WAV sound)

Domenici and Kasich

Although Kasich and Domenici are not part of the budget negotiating team, they were sitting just outside the Oval Office during Saturday's budget talks. Among those participating in the negotiations Saturday were Clinton, Senate Majority leader Bob Dole and House Speaker Newt Gingrich.

The Republicans will present Clinton a counter-offer, according to a Republican aide.

Domenici said the measure, a revised version of a plan proposed by Senate Minority leader Thomas Daschle, R-South Dakota, would spend $300 billion more than Republicans have proposed through 2002. He and Kasich said it did not overhaul Medicare, welfare and other social programs enough.

Clinton said he was pleased Congress has completed the task of re-opening the federal government and he hopes "no Congress will ever again shut the federal government down in this way." "It was morally indefensible to hold needed government services and hard-working government employees hostages in a political battle," he said. (307K AIFF sound or 307K WAV sound)

The Clinton-Daschle plan, the president said, was a "sensible solution" that shows "that you can balance the budget in 7 years, and protect Medicare and Medicaid, education and the environment and provide tax relief to working families."

Clinton plan earmarks surplus funds

According to Democrats, the Clinton plan would cut taxes over seven years by $87 billion, much below the GOP's $240 billion proposal. It would cut some $102 billion from Medicare and $52 billion from Medicaid spending -- half the amount Republicans want. It would slash an additional $295 billion from other domestic programs, three-fourths of what the GOP had proposed.

In case the economy performs better than the CBO expects, the plan contains a feature which would allow the surplus to be divided among domestic programs, tax cuts, and deficit reduction. The White House's Office of Management and Budget projects the plan will create a $194 billion surplus for the government to spend over the next seven years.

Early Saturday, Clinton signed legislation which restored the wages and jobs of some 760,000 federal workers affected by the record three-week shutdown. But that measure and a companion bill he signed reopened only some of the programs in the closed agencies.

But if the White House and Republicans fail to sign a final budget deal or agree to other temporary measures to keep agencies functioning beyond January 26, another shutdown could occur.

Clinton had been under pressure from many Democrats to present a plan using the CBO figures because they were worried that the public would begin to accept the Republican argument that the president was trying to avoid producing a balanced-budget plan.

Dole's camp was hailing Clinton's compromise as a big victory for the GOP presidential front-runner. Dole press secretary Nelson Warfield said that while Senate majority leader's critics in the GOP South Carolina debate were "dragging him through the mud, Bob Dole was dragging Bill Clinton closer to a Republican balanced budget."

In Columbia, South Carolina, GOP presidential aspirant Phil Gramm, R-Texas, said Dole was "cutting a deal with Clinton."

"Bob Dole said it doesn't matter that he's not here tonight. Maybe it doesn't. But it does matter that he's in Washington cutting a deal with Bill Clinton. And I'm not going to do that."

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