US budget deal leaves two sides still far apart

JOHN CARLIN

Washington

President Bill Clinton has given the Republicans the minimum they sought in budget negotiations and in exchange secured from Congress the funds necessary to end the longest government shutdown in United States history.

But the fundamental differences between the two sides on budget priorities remain as wide as ever.

In a tactical concession, Mr Clinton submitted a proposal late on Saturday night for balancing the budget within seven years. For the past year he had contended that such a plan was not feasible but now, eager to end a partial government shutdown that had lasted since 16 December, he has relented.

After Mr Clinton had set his budget-balancing document on the table, Congress, both houses of which are dominated by the Republicans, submitted the legislation required to reopen government and the President signed it.

"This plan will show that you can balance the budget in seven years and protect Medicare, Medicaid, education and the environment, and provide tax relief to working families," Mr Clinton said. "This is a time of great national promise. We need to find unity and common ground."

The Republicans took a somewhat different view. According to a Republican source who was privy to negotiations at the White House on Saturday, Newt Gingrich, the Speaker of the House of Representatives, told the President: "If this is where you are, we're so far apart we'd better start thinking about how we can call this off."

Tom Delay, one of Mr Gingrich's more zealous congressional cohorts, accused the President yesterday on NBC Television's Meet the Press of not negotiating in good faith.

"The good news is that the President has come up with a balanced budget proposal," Mr Delay said. "The bad news is that it's the same old tax- and-spend philosophy that's been going on for 30 years."

The Republicans' frustration arises from the realisation that they will find it very difficult to bring about their much-trumpeted "revolution", and destroy the "welfare state", in the face of stiff presidential opposition.

The other part of the revolutionary equation entails restoring power to the individual, which translated means cutting taxes.

Mr Clinton's budget-balancing proposal on Saturday showed that he remains resolved to withstand the Republican siege. So successfully is he doing this that the New York Times said in a front-page article on Saturday that the Republicans "seemed for the first time to be in retreat, much in the manner of Napoleon's ill-fated assault on Moscow".

What the President managed to do, while caving in on the demand that he come up with a seven-year balanced budget document, was to submit a plan whose numbers appear, on present projections, to work but which aims to reach its destination by a route substantially different from the one the Republicans would like to take.

Overall, Mr Clinton would spend $400bn (about pounds 260bn) more than the Republicans over the next seven years. He intends to cut far less on welfare, notably on health care for the elderly (Medicare), than the Republicans wish. And on taxes the President means to offer relief to families earning under $75,000 a year, but deny cuts to the wealthier Americans the Republicans seek to reward.