White House strategists running battle scenarios for the upcoming fight with Congress this fall over spending and taxes are increasingly concluding that the likeliest outcome is a minimalist, get-out-of-town package that will include only must-pass appropriations bills, a tiny collection of tax cuts and a little extra spending for Medicare.
That would put an end to the two parties' most ambitious goals for this year--a significant package of tax cuts, a prescription drug benefit for Medicare beneficiaries and broad overhauls of Social Security and Medicare.
Instead, key strategists at the White House and on Capitol Hill believe the White House and the Republican-controlled Congress are so polarized that they will wind up doing only the bare minimum they need to finish the year, avoid a government shutdown and go home.
"That is my best guess of what happens," said a knowledgeable administration aide.
"The minimalist approach seems the most likely outcome from my perspective at this time," agreed G. William Hoagland, GOP chief of staff for the Senate Budget Committee. "The waters have been so poisoned . . . that anything significant in a 'deal' is unrealistic this fall."
The White House's chief economic strategist, National Economic Adviser Gene Sperling, declined to endorse the minimalist scenario outlined by some of his administration colleagues, insisting that would be a "very disappointing" outcome. "There's no good public policy reason at all for anyone to throw in the towel on getting a meaningful Medicare reform package through," he said. "We're going to make every good faith effort possible."
Even a minimalist package won't be easy. Congress and the White House are about as far apart on spending bills as they are on taxes, for example. The difference is that the two sides must come to terms on the spending bills or risk a government shutdown similar to the two closures that occurred in 1995-96. That experience so stung congressional Republicans that a repeat is believed to be highly unlikely this fall.
Tax cuts, by contrast, are not mandatory, except for a small package of expiring tax breaks that both sides want to extend. President Clinton has already promised to veto the Republicans' $792 billion, 10-year tax cut package as soon as Congress, currently in recess, sends it to the White House in September.
The White House has said it would consider a package of tax cuts worth $250 billion to $300 billion, but participants are pessimistic about a compromise. "The gap is so big between where Republicans are and where Democrats are [on tax cuts] that it will be extraordinarily hard to find middle ground," said Tom Kahn, Democratic chief of staff for the House Budget Committee.
Even if the White House could cut a deal with GOP leaders, there is no conviction that either side could sell it to its rank and file. The White House is unsure whether it could drum up support for a compromise among House Democrats, who may figure that no deal is better than a compromise that makes the GOP majority look productive.
Republicans seem just as shaky. The extremely narrow GOP majority in the House gives conservatives effective veto power over any deal they consider too weak. And there is no certainty at the White House that House Speaker J. Dennis Hastert (R-Ill.) can whip his troops into line the way his predecessor, then-Speaker Newt Gingrich (R-Ga.), did to get them to support budget deals with the White House in 1997 and 1998.
White House analysts said they have produced numerous possible outcomes for this fall's budget showdown, and that anything is possible--at least theoretically--in turbulent, end-of-session horse-trading. But here's what key White House aides say--and some Hill aides agree--are the probable components of a minimalist deal:
* Appropriations bills. Of the 13 spending bills Congress must pass and Clinton must sign, Congress has finished just two. Several more labor under White House veto threats, and the most contentious measure--the bill that funds the departments of Labor, Education, and Health and Human Services and includes administration priorities for education and social programs--has gone virtually nowhere, hobbled by a severe lack of funds.
Both sides are contending with spending caps too tight to meet without politically unachievable cuts in popular spending programs, but neither side wants the sole blame for exceeding the limits. While the nominal deadline for the bills is midnight Sept. 30, negotiators will almost surely need several short-term extensions as they bargain into October or later to get a deal.
* Tax "extenders." By contrast, the rest of the package should be fairly easy. Both the White House and Congress want to extend several popular tax breaks, such as one that gives business and industry a tax credit for research and development. This bare-bones package won't satisfy hard-core GOP tax-cutters, but it is cheap to pay for and easy to pass.
* Medicare "givebacks." Ironically in a year when politicians have been talking about overhauling the nation's health insurance program for the elderly--possibly by scaling back benefits or raising the cost to beneficiaries--the likeliest action is an undoing of some cost-saving measures made in the balanced budget deal of 1997.