President Clinton bowed to months of Republican demands Saturday and offered a seven-year balanced-budget plan using Congressional Budget Office figures, a key moment at White House budget talks that will allow the entire government to emerge from its three-week shutdown.
Republicans criticized the president's budget proposal as containing too much spending and actually increasing taxes, rather than reducing them. But Democrats said the measure eliminated federal deficits with gentler reductions in important social programs than Republicans want."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," Clinton told reporters as he sat at his Oval Office desk.
"This is a time of great national promise. We need to find unity and common ground," he said.
Both sides said the Congressional Budget Office had certified that the proposal would eliminate federal deficits by 2002. Clinton signed legislation approved Friday by Congress that as a result of that CBO certification will immediately reopen all federal programs that remain shuttered - at least until Jan. 26.
Clinton's embrace of the proposal still left the two sides searching for a deal for balancing the budget in seven years by paring savings from Medicare, Medicaid and other social programs, plus cutting taxes. More negotiations were scheduled for Sunday and Monday, although a snowstorm approaching Washington could affect those plans.
Republicans said Clinton's new plan was crucial because it would help clarify how close to a sweeping budget deal the two sides might be.
"The good news is that at least we're going to have a document on the table" that Republicans can evaluate, said House Budget Committee Chairman John Kasich, R-Ohio.
Clinton's decision to propose a balanced-budget plan certified by the Congressional Budget Office represents a retreat for Clinton, who for months had refused to do just that.
The president argued that CBO's economic forecasts are too conservative and that embracing them would therefore require steeper savings than he says are really needed.
But Clinton had been under pressure from many Democrats in Congress to back a plan using CBO figures because they feared Republicans were winning the argument that the president was trying to avoid producing an honest balanced-budget plan.
Kasich and Senate Budget Committee Chairman Pete Domenici, R-N.M., said Clinton's proposal, originally written by Senate Minority Leader Tom Daschle, D-S.D., would spend $400 billion to $500 billion more than Republicans have proposed through 2002. They also said it would not do enough to revamp Medicare, welfare and other social programs Republicans want to overhaul.
According to Democrats, the Clinton plan would cut taxes over seven years by $87 billion, well below the GOP's $240 billion proposal. It would extract savings of $102 billion from Medicare and $52 billion from Medicaid, about half what Republicans want, plus an additional $295 billion from other domestic programs - about 75 percent of the GOP proposal.
Another feature of Clinton's new plan would provide that if the economy performs as well as the White House's Office of Management and Budget projects it will, there would be an additional $194 billion for the government to spend over the next seven years. One-third of the extra money would be used for domestic programs Clinton says would spark the economy, one-third for more tax cuts and one-third for extra deficit reduction.
Clinton signed legislation early Saturday restoring the wages and jobs of 760,000 federal workers who had been caught in the 21-day federal shutdown. But that measure - and a companion bill he signed Saturday - reopened only some of the programs in the scores of departments and agencies that had been affected by the shutdown.
Under the terms of another measure Congress approved on Friday, Clinton's endorsement of a balanced-budget proposal certified by CBO will let all other affected programs resume functioning through Jan. 26.
Other details of Clinton's new budget include:
- The closing of $60 billion worth of corporate tax loopholes over seven years. That is more than double what Republicans have proposed.
- Welfare savings of $46 billion and reductions in the earned income tax credit for the poor of $2 billion - a bit more than half what the GOP proposes.
- There would be no reductions in farm aid or student loans.