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  • GOP Reps. Ehrlich, Watts, McIntosh, Portman and Thune on the Republican tax plan.

  • Democratic Reps. Frost and Cardin discussed the Democratic side.

  • White House spokesman Barry Toiv discussed the White House position.

  • Hill Republicans Hold Key to Compromise

    By John F. Harris and Eric Pianin
    Washington Post Staff Writers
    Sunday, September 5, 1999; Page A10

    After spending the August congressional recess assailing the Republicans' $792 billion tax cut as irresponsibly large, President Clinton and his senior aides hope they have decisively won the battle for public opinion and that GOP leaders will return to Washington this week seeking conciliation.

    Clinton will veto the tax bill when it arrives on his desk later this month, but he reiterated in his weekly radio address yesterday that he is willing to support a smaller package in return for Republican concessions on Medicare including a prescription drug benefit for seniors and other spending.

    "We're looking forward to getting this season of politics behind us," said White House Chief of Staff John D. Podesta in an interview. "We can still make bipartisan progress across-the-board."

    Yet as the White House and Congress confront a post-Labor Day to-do list filled with contentious issues including 11 of the 13 annual appropriations bills and proposals to regulate health maintenance organizations and overhaul Medicare and Social Security Clinton and congressional Democrats are making clear that their idea of bipartisanship means the other side makes the first move.

    "We can either end up with more confrontation, which we do not seek but they may force upon us, or they can try to work with us," Podesta said.

    As the White House hews to a hard line, much of what happens will depend on what returning congressional Republicans decide. With control of the House and Senate as well as the White House at stake in next year's election, they must decide whether it is in their political interest to compromise on core issues such as taxes to demonstrate they can govern effectively or settle for a philosophical standoff heading into 2000.

    Republicans used the August recess to try to drum up public support for their tax bill and force Clinton to reconsider his repeated veto threat. But the series of town hall meetings and other media events have apparently done little to alter public opinion or the president's strategy, leaving the leadership in a quandary over what to do after its bill is vetoed.

    Interviews last week suggest that Republican leaders are dividing into two camps, with hard-liners including House Majority Whip Tom DeLay (R-Tex.) and Senate Majority Leader Trent Lott (R-Miss.) favoring a take-it-or-leave-it approach, while House Speaker J. Dennis Hastert (R-Ill.), House Majority Leader Richard K. Armey (R-Tex.) and others are counseling more flexibility that could lead to a deal on a smaller package possibly totaling $500 billion to $600 billion. Clinton insists he would accept no more than $300 billion of tax cuts.

    With polls indicating considerable public support for reducing the nation's $5.6 trillion accumulated debt, both sides increasingly are seeing political virtue in doing nothing on taxes this year if they can't have their way. In the absence of a tax cut, the $1 trillion of projected surpluses over the coming decade outside the Social Security trust fund would go to begin paying down the debt.

    "If a mega-deal isn't in the cards, we still have a huge accomplishment for debt relief," said a senior House GOP aide. "There's a huge appetite for that as evidenced by the White House's own polls, and it takes the issue of a do-nothing Congress off the table."

    This year began with great uncertainty over how Congress and the administration could work out their differences over legislation after Clinton's impeachment trial, and it is ending with the same sense of suspense.

    Rather than seeking accommodation over the summer break, both sides spent much of August engaged in a political argument. Clinton sought to portray the Republicans as irresponsible tax cutters threatening to jeopardize Social Security, Medicare and other domestic programs. Republicans staged events across the country seeking to paint Clinton as insensitive to the needs of average taxpayers and intent on new government programs that would eat into the surplus.

    Yesterday, House Republican Conference Chairman J.C. Watts (R-Okla.) said a recent Wirthlin Worldwide survey shows that "the majority of Americans favors the Republicans' sensible tax relief plan. . . . Let's hope the president doesn't veto the will of the American majority."

    "I think it will be very hard to find a middle ground between the two sides," said Thomas Kahn, the chief Democratic aide on the House Budget Committee. "The gap is too great. There's a lot of mistrust on both sides."

    While once there were high expectations for some type of comprehensive deal, including tax cuts and Medicare and Social Security overhauls, many in both parties now predict a minimalist approach, with the primary focus on completing work on the annual spending bills and a few other legislative priorities.

    But even a less ambitious finale would not be easy to orchestrate. Congress and the administration are laboring under strict spending limits imposed by the 1997 budget deal, and the leadership and the White House are $25 billion to $35 billion apart over how much they want to spend in the 11 remaining appropriations bills.

    Podesta said in an interview last Friday that the Republicans might be more willing to consider Clinton's proposal to raise the tobacco tax now that they are in such a tight bind with the spending caps.

    There is also an imposing list of non-budgetary legislation that is likely to stir partisan passions but stall short of enactment unless Republicans and Democrats show more inclination to compromise than they have so far. In the current political climate, issues such as campaign finance reform, HMO patients' rights, gun control and the minimum wage seem more likely to turn up in political campaigns than in the statute books.

    The White House's stance on the Republicans' tax plan reflects Clinton's confidence that he has neutralized what was once the GOP's most potent issue. In his West Wing office, Podesta was literally laughing with derision as he mockingly suggested that maybe Republicans would come back to Washington armed with new polls showing that over the break, their tax cut had finally become a "resounding success."

    But even if Clinton has the short-term advantage over Republicans, the GOP has some leverage of its own: It can give or deny Clinton substantial legislative achievements this year. Historically, a president's final term in office yields few policy achievements as the attention of the political world shifts to the election. That means if Clinton is to reap major achievements, including overhaul of Medicare, it is most likely to happen in the next several weeks.

    Podesta acknowledged that the White House is watching intently for clues as to what Republicans will do seek conflict or compromise and Clinton will calibrate his own strategy accordingly.

    In his radio address, Clinton said he wrote Congress yesterday asking it to pass gun control legislation and a patients' bill of rights and said he would sign both.

    But the staff chief vowed that Clinton is determined to avoid irrelevancy even if Republicans do not want to deal with him. He is planning executive actions on such things as medical privacy rules, clean-air regulations, and ways to promote parental leave.

    For now, he said, the White House has no clear sense who is in charge on Capitol Hill. "The question is whether they're pursuing Tom DeLay's strategy, or Speaker Hastert's strategy, or Pete Domenici's strategy." Domenici, the Senate Budget Committee chairman, is known to still hold out hope for a comprehensive deal including a more modest tax cut.

    Podesta stressed that Medicare "is one of the big blocks that must fall into place," before Clinton is willing to consider what other blocks might fit into this fall's package.

    Staff writer Helen Dewar contributed to this report. Washington Post Staff Writers

    After spending the August congressional recess assailing the Republicans' $792 billion tax cut as irresponsibly large, President Clinton and his senior aides hope they have decisively won the battle for public opinion and that GOP leaders will return to Washington this week seeking conciliation.

    Clinton will veto the tax bill when it arrives on his desk later this month, but he reiterated in his weekly radio address yesterday that he is willing to support a smaller package in return for Republican concessions on Medicare including a prescription drug benefit for seniors and other spending.

    "We're looking forward to getting this season of politics behind us," said White House Chief of Staff John D. Podesta in an interview. "We can still make bipartisan progress across-the-board."

    Yet as the White House and Congress confront a post-Labor Day to-do list filled with contentious issues including 11 of the 13 annual appropriations bills and proposals to regulate health maintenance organizations and overhaul Medicare and Social Security Clinton and congressional Democrats are making clear that their idea of bipartisanship means the other side makes the first move.

    "We can either end up with more confrontation, which we do not seek but they may force upon us, or they can try to work with us," Podesta said.

    As the White House hews to a hard line, much of what happens will depend on what returning congressional Republicans decide. With control of the House and Senate as well as the White House at stake in next year's election, they must decide whether it is in their political interest to compromise on core issues such as taxes to demonstrate they can govern effectively or settle for a philosophical standoff heading into 2000.

    Republicans used the August recess to try to drum up public support for their tax bill and force Clinton to reconsider his repeated veto threat. But the series of town hall meetings and other media events have apparently done little to alter public opinion or the president's strategy, leaving the leadership in a quandary over what to do after its bill is vetoed.

    Interviews last week suggest that Republican leaders are dividing into two camps, with hard-liners including House Majority Whip Tom DeLay (R-Tex.) and Senate Majority Leader Trent Lott (R-Miss.) favoring a take-it-or-leave-it approach, while House Speaker J. Dennis Hastert (R-Ill.), House Majority Leader Richard K. Armey (R-Tex.) and others are counseling more flexibility that could lead to a deal on a smaller package possibly totaling $500 billion to $600 billion. Clinton insists he would accept no more than $300 billion of tax cuts.

    With polls indicating considerable public support for reducing the nation's $5.6 trillion accumulated debt, both sides increasingly are seeing political virtue in doing nothing on taxes this year if they can't have their way. In the absence of a tax cut, the $1 trillion of projected surpluses over the coming decade outside the Social Security trust fund would go to begin paying down the debt.

    "If a mega-deal isn't in the cards, we still have a huge accomplishment for debt relief," said a senior House GOP aide. "There's a huge appetite for that as evidenced by the White House's own polls, and it takes the issue of a do-nothing Congress off the table."

    This year began with great uncertainty over how Congress and the administration could work out their differences over legislation after Clinton's impeachment trial, and it is ending with the same sense of suspense.

    Rather than seeking accommodation over the summer break, both sides spent much of August engaged in a political argument. Clinton sought to portray the Republicans as irresponsible tax cutters threatening to jeopardize Social Security, Medicare and other domestic programs. Republicans staged events across the country seeking to paint Clinton as insensitive to the needs of average taxpayers and intent on new government programs that would eat into the surplus.

    Yesterday, House Republican Conference Chairman J.C. Watts (R-Okla.) said a recent Wirthlin Worldwide survey shows that "the majority of Americans favors the Republicans' sensible tax relief plan. . . . Let's hope the president doesn't veto the will of the American majority."

    "I think it will be very hard to find a middle ground between the two sides," said Thomas Kahn, the Democratic staff director on the House Budget Committee. "The gap is too great. There's a lot of mistrust on both sides."

    While once there were high expectations for some type of comprehensive deal, including tax cuts and Medicare and Social Security overhauls, many in both parties now predict a minimalist approach, with the primary focus on completing work on the annual spending bills and a few other legislative priorities.

    But even a less ambitious finale would not be easy to orchestrate. Congress and the administration are laboring under strict spending limits imposed by the 1997 budget deal, and the leadership and the White House are $25 billion to $35 billion apart over how much they want to spend in the 11 remaining appropriations bills.

    Podesta said in an interview last Friday that the Republicans might be more willing to consider Clinton's proposal to raise the tobacco tax now that they are in such a tight bind with the spending caps.

    There is also an imposing list of non-budgetary legislation that is likely to stir partisan passions but stall short of enactment unless Republicans and Democrats show more inclination to compromise than they have so far. In the current political climate, issues such as campaign finance reform, HMO patients' rights, gun control and the minimum wage seem more likely to turn up in political campaigns than in the statute books.

    The White House's stance on the Republicans' tax plan reflects Clinton's confidence that he has neutralized what was once the GOP's most potent issue. In his West Wing office, Podesta was literally laughing with derision as he mockingly suggested that maybe Republicans would come back to Washington armed with new polls showing that over the break, their tax cut had finally become a "resounding success."

    But even if Clinton has the short-term advantage over Republicans, the GOP has some leverage of its own: It can give or deny Clinton substantial legislative achievements this year. Historically, a president's final term in office yields few policy achievements as the attention of the political world shifts to the election. That means if Clinton is to reap major achievements, including overhaul of Medicare, it is most likely to happen in the next several weeks.

    Podesta acknowledged that the White House is watching intently for clues as to what Republicans will do seek conflict or compromise and Clinton will calibrate his own strategy accordingly.

    In his radio address, Clinton said he wrote Congress yesterday asking it to pass gun control legislation and a patients' bill of rights and said he would sign both.

    But the staff chief vowed that Clinton is determined to avoid irrelevancy even if Republicans do not want to deal with him. He is planning executive actions on such things as medical privacy rules, clean-air regulations, and ways to promote parental leave.

    For now, Podesta said, the White House has no clear sense who is in charge on Capitol Hill. "The question is whether they're pursuing Tom DeLay's strategy, or Speaker Hastert's strategy, or Pete Domenici's strategy," he said. Domenici, the Senate Budget Committee chairman, is known to still hold out hope for a comprehensive deal including a more modest tax cut.

    Podesta stressed that Medicare "is one of the big blocks that must fall into place," before Clinton is willing to consider what other blocks might fit into this fall's package.

    Staff writer Helen Dewar contributed to this report.

    © 1999 The Washington Post Company

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