When the White House chief of staff, Leon Panetta, took his latest offers for ending a government shutdown to Republican budget committee leaders at midafternoon Sunday, his negotiating team was not especially optimistic.
Members made two modest proposals that would commit President Clinton to the Republicans' goal of balancing the budget in seven years. But, they recalled Monday, each offer also included an escape clause big enough to seem a sucker punch.The first would have cloaked such a commitment in a nonbinding "sense of Congress" resolution that would not require the president's signature. The second stipulated that the goal of balancing the budget would be valid "if and only if" the president and Congress agreed that such a budget would "protect Medicare, Medicaid, education, the environment and doesn't raise taxes on working families."
Sen. Pete Domenici of New Mexico, the moderate Republican chairman of the Senate Budget Committee, immediately cast aside the laundry list in the second proposal as just so many unacceptable wiggle-words, participants recalled, and the session in Sen. Bob Dole's office soon broke up.
But less than three hours later, that laundry list became the basis for a final deal, reworked and expanded a bit by the Republicans in a palindrome of a paragraph in which each element of agreement depends on every other one, and in which both sides got to endorse programs protecting everyone from to veterans to farmers to the elderly. It proved more than enough to let each side claim it had not blinked.
How that happened is a story of rising internal tensions between the White House and congressional Democrats, and between House and Senate Republicans, the presidential ambitions of Dole and Speaker Newt Gingrich's pique at his treatment on Air Force One, public opinion polls that showed the White House maintaining the upper hand, the approach of Thanks-giving vacation, and the realization by both sides that both could ultimately lose if the stalemate dragged on.
In the end, participants said, House Republicans preferred the language protecting various programs like Medicare and Medicaid, because they have contended all along that they intended them no harm.
What they would not countenance was an unsigned resolution, which would amount to written acknowledgment that the whole agreement is merely a prelude and holding action to the debate ahead on the Republicans' overall plan to balance the budget by 2002, which Clinton has repeatedly threatened to veto as too harsh on the programs he favors.
"Our thinking was that they were asking for hortatory language about things with which we had no disagreement," said Gingrich's spokesman, Tony Blankley.
"They may have been saying that we wanted to burn babies in oil and throw people into the gutter, but that's never been our policy."
But for the White House, the laundry list was much more than that: It was the thread that might ultimately help unravel the whole cloth of the Republicans' broader plans and priorities. Or, as Clinton's spokesman Michael McCurry put it Monday, "The first time that the Republican leadership in Congress did acknowledge the president's priorities."
Both sides agreed Monday that the tide in negotiations began turning last Thursday, with the shutdown entering its third day and both camps increasingly edgy.
The night before, the House had passed a stopgap spending measure that included a provision to balance the budget in seven years, and enough moderate Democrats backed it to come within six votes of providing the two-thirds margin needed to override Clinton's promised veto.
White House aides, led by Vice President Al Gore, spent an anxious night of nose counting, worried that support for the pres-i-dent's position was slipping.
Thursday, the House erupted into guffaws over Gingrich's complaint that he had loaded the temporary spending bills with unac-cep-table conditions in part to spite Clinton for his treatment of the speaker and Dole on their flight to and from Prime Minister Yitzhak Rabin's funeral in Israel. Conservatives denounced Gingrich for stepping on his own message.
By Friday, the rhetoric had cooled, and both sides were talking, but an agreement seemed close, only to slip away. Late that day, the administration proposed to make balancing the budget in seven years a "goal" rather than a firm commitment and proposed language offering to do so in seven years with Congressional Budget Office estimates, as Congress wanted, or in a time frame and with economic assumptions mutually agreed to by negotiators.
The Republicans rejected that approach as too vague. But by this point, Republican Senate aides recalled, Dole sensed that Gingrich's stature had been badly wounded by the plane flap, and on Saturday, the Senate leader called Domenici to say that he and the House budget chairman, Rep. John Kasich of Ohio, should get cracking on a deal.
"We've got to get this thing to an end," one aide recalled Dole as saying. After returning from a campaign appearance in Florida, Dole corralled Republicans into coming up with an olive branch of their own.
The Republicans offered to use updated estimates from the Congressional Budget Office, after consultations with the more optimistic White House Office of Management and Budget.
The White House interpreted the move as a serious gesture of good faith and kept mum about it overnight. On Sunday, Dole's rival for the Republican nomination, Sen. Phil Gramm of Texas, attacked the proposal as a potential giveaway, while Panetta and the president's senior adviser, George Stephanopoulos, went back to Capitol Hill with their two-pronged counteroffer.
"There's no question that Dole played a real role here," one senior administration official said.
Though Republican aides said senators like Domenici viewed the laundry list as the weaker of the two offers, House negotiators preferred it because it was not couched as a nonbinding resolution. In fact, Dole suggested adding welfare overhaul and national defense to the list of programs the president wanted to protect.
"We said, `Hey, this is his political agenda,' " one Republican aide recalled. "If we're going to go this way, let's put ours on it, too."
Because congressional parliamentarians agree that any such proviso is nonbinding, pending final agreement on a budget, the White House was perfectly willing to accept it.
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CROSSROADS
More on the federal budget is available online. Search for document XBUDG21.
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ADDITIONAL INFORMATION
Hatch doesn't see a compromise coming soon
Sen. Orrin Hatch, R-Utah, doesn't think President Clinton and Congress will meet a Dec. 15 deadline to come up with a budget compromise.
But the government won't shut down again, another continuing funding resolution will just be adopted, says Utah's senior senator. Hatch thinks lawmakers and Clinton will work until Christmas on the budget - maybe even longer.
Hatch believes it's likely there won't be a budget this year at all. "We could just go through 1996" with continuing resolutions, waiting for the presidential and congressional elections to take place, Hatch told the Deseret News editorial board Monday.
Hatch said the president is being intransigent and is pleased GOP leaders stuck with balancing the budget in seven years.
The Republican Medicare reform package doesn't cut spending - like Democrats claim, Hatch said, and the tax cut plan isn't for the rich. The $500-per-child tax credit will mean a $2,000 cut in taxes for a Utah family with four children under 18, Hatch said. "Seventy-nine percent of the people who get that tax cut make less than $100,000 a year," he said.