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Budget in the balance

Shipman January 7, 1996
Web posted at: 11:25 p.m. EST

From Correspondent Claire Shipman

WASHINGTON (CNN) -- The government shutdown continued through the weekend, despite an agreement by Republicans and Democrats to reopen. But budget negotiations weren't the culprit -- record breaking snowfall closed the capital Sunday, scuttling planned budget meetings.

And late Sunday night, the Office of Personnel Management announced that the severe storm would keep government offices closed through Monday at least.

Clintons President Clinton did venture out to church, and sounded optimistic about continued progress. Despite Republican complaints about the budget plan he introduced Saturday, the president said "We'll keep working." (92K AIFF sound or 92K WAV sound)

Saturday night, the President met a key Republican demand when he offered a seven-year balanced budget proposal using Congressional economic forecasts.

His plan would cut $102 billion from Medicare -- about half what Republicans proposed -- and offer a tax cut of only $87 billion, compared to $240 billion in the GOP plan. The White House would increase the size of its proposed tax cut, though, if the economy performs well.

Republicans conceded that Clinton had met their demands for a concrete budget, but grumbled about the spending allocations.

Boehner "The bad news is the plan he put there showed that he rally isn't the new Democrat he kept saying he was," said Rep. John Boehner, R-Ohio, who accused the president of being "a big spending liberal." (139K AIFF sound or 139K WAV sound)

Despite apparent concessions on both sides, many wonder whether the budget negotiations can move any further. The President has done what the Republicans asked for, and administration officials say that on Medicare, for example, they are not likely to accept any more changes.

Budget graphic "The numbers they put forth and the policy they put forth were in their judgment as far as they could go and still preserve an effective health care system," said Treasury Secretary Robert Rubin Sunday on NBC's "Meet the Press."

White House officials say Republicans must compromise on their proposed tax cut if they want an agreement, while Republicans will be after greater savings from Medicare and Medicaid.

But a deal is still a long shot. Officials say they give it only a 50-50 chance. They say the next week should make clear whether a balanced budget becomes a reality, or the primary issue in the '96 campaign.

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