President Clinton last night vetoed legislation that would have averted a shutdown of the government today. A last-minute attempt at compromise between the White House and Republican congressional leaders ended without agreement just before midnight.

Senate Majority Leader Robert J. Dole (R-Kan.) said, "We don't have an agreement," but said that White House and GOP budget leaders will meet again today to continue negotiations. House Speaker Newt Gingrich (R-Ga.) said that all sides in the nearly two-hour meeting laid out "in a candid way" compromises each felt the other must make, and that the talks were productive enough to continue today.

In vetoing the temporary spending legislation offered by Republicans to keep the government operating another 18 days, Clinton had said it "would raise Medicare premiums on senior citizens and deeply cut education and environmental programs."

Following the late-night meeting, Gingrich said that he had offered a proposal to pass a spending bill stripped of Medicare provisions and more in line with Clinton's spending requirements, in exchange for a White House commitment to reaching a balanced budget in seven years using congressional figures as a benchmark. He said Clinton did not reject that out of hand and that it led to "a further discussion on various ways to get to a balanced budget."

Democratic leaders who attended the meeting offered a much more pessimistic assessment of the possibilities for compromise. Senate Minority Leader Thomas A. Daschle (D-S.D.) said there had been "no progress at all" and there was "no real possibility" of getting an acceptable short-term spending bill that would avoid or limit a government shutdown.

Congress failed to pass all 13 annual spending bills by Oct. 1, the start of the fiscal year, and an interim spending measure expired last night at midnight. The GOP-proposed measure Clinton rejected last night would have extended spending authority until Dec. 1.

With no assurance of a compromise, the government was poised to begin a partial shutdown and temporary furlough of more than 800,000 "nonessential" federal workers, including 150,000 of the Washington area's 310,000 federal employees. The District of Columbia government also will send home all but essential employees.

The budget battle between Congress and the White House played out like a day-long moving picture of charges, countercharges, back-channel negotiations and high tensions among House and Senate Republicans before the president and GOP and Democratic leaders finally sat down at the White House to negotiate.

Earlier yesterday Clinton vetoed a separate bill that would have temporarily raised the federal debt ceiling until Dec. 13 to avert a possible government default.

The debt ceiling bill arrived at the White House Sunday and there was virtually no doubt that Clinton would veto it. At the Treasury Department, Secretary Robert E. Rubin announced a series of maneuvers that officials say will avert a default on government loans. And while the president and Republicans continued to bitterly blame one another, a new poll shows that Americans blame Republicans more than the president for the crisis.

There was one glimmer of hope yesterday over the short-term spending bill when Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) offered, in conversation with White House Chief of Staff Leon E. Panetta, to freeze Medicare premiums.

The move would have kept Part B premiums, which cover doctor bills, at the current $46.10 per month rate. The legislation Clinton vetoed last night called for raising the premium to $53.50 on Jan. 1. With no congressional action, rates would drop to $42.50 per month.

Domenici's eleventh-hour Medicare compromise proposal seemed to catch Gingrich, House Budget Committee Chairman John R. Kasich (R-Ohio) and other House GOP leaders by surprise and sparked bitter complaints from some that Domenici was undermining their bargaining position with the White House.

The proposal would have been difficult, if not impossible, for Gingrich to sell to House freshmen and other conservatives after they were forced to make a number of concessions on the spending legislation, or continuing resolution, and on the debt ceiling legislation last week. Rep. Bill Thomas (R-Calif.), chairman of the Ways and Means subcommittee with chief jurisdiction over Medicare, said the plan "makes no sense from a policy point of view."

Domenici and Dole have been wary of the political repercussions of a government shutdown, and the Domenici overture was an attempt to keep the government running. "I don't want to see the government close down," Domenici told reporters. But the proposal was killed during an afternoon meeting of the House and Senate Republican leaders, and Dole headed back to the Senate to pass the continuing resolution without changes and send it on to the White House and a certain veto.

While the efforts to find a way out of the shutdown went on late into the night, both sides continued their message drumbeat for public consumption: Clinton maintained he was protecting Medicare and fighting for a budget that reflected the nation's "values," while Republicans maintained Clinton talked the talk of a balanced budget but won't lead in finding a real route to one and won't sign into law any of the steps needed to get there.

At first blush, Clinton's message -- not the GOP one -- was the one coming through to the American public and accounts at least in part for Republican second thoughts about their Medicare proposals.

A new Washington Post-ABC News survey completed last night found that more Americans blamed the Republicans in Congress than Clinton for the budget impasse. According to the poll, 46 percent of those interviewed faulted congressional Republicans for the budget stalemate, while 27 percent blamed the president. One in five said Clinton and congressional Republicans were equally at fault.

The poll of 1,005 adults, conducted Friday through yesterday, also found that 54 percent said they agreed with Clinton that the GOP budget proposal "makes too many cuts in domestic programs and gives tax breaks to the wealthy." Nearly a third, 32 percent, said they favored the GOP plan to balance the budget in seven years and cut taxes for most Americans, while the remainder were undecided. Overall, more than one-half, 53 percent, said that Clinton's position on the budget was closer to their own, while 37 percent sided with the GOP.

In a rousing address to the Democratic Leadership Council, Clinton adopted Churchillian cadences to say of the Republican budget strategy: "I will fight it. I am fighting it today. I will fight it tomorrow. I will fight it next week and I will fight it next month. I will fight it until we get a budget that is fair to all Americans."

After White House press secretary Michael McCurry announced at midday that Clinton would veto the spending bill even if the Medicare provision were removed, Republicans concluded that Clinton's opposition to the Medicare language was a smokescreen.

Republicans, who had been squabbling among themselves over whether any compromise should be offered, quickly dropped the Medicare overture, passed their version of the spending bill and began another round of maneuvering late into the night.

"It must look like a spectacle to the average American," said Gingrich.

Accepting the GOP compromise feelers would have met the president's major stated weekend objection to the GOP spending plan but also would have removed Clinton's most potent political tool: the charge that Republicans were raising premiums on the elderly as part of their "extreme" agenda.

The president cut to three days his scheduled six-day state visit to Japan and dug in for an extended battle. But until the Republicans had asked for the late-night meeting, the president preferred to stand back and watch the unfolding confusion in Congress.

There was no effort made by the White House to try to reach a last-minute compromise on the debt ceiling legislation, which Clinton vetoed in the early morning. That legislation would have extended the government's authority to borrow by raising the debt ceiling to $4.967 trillion.

The debt legislation contained a slew of proposals Clinton rejected, including a pledge to balance the budget in seven years, telecommunications legislation and restrictions on how the Treasury could manage money in the event of another debt problem.

Despite the veto, the bond market erased losses that started late last week and rallied yesterday after Rubin laid out details of government financing plans that will both keep borrowing levels under the $4.9 trillion cap and avert a default on a $25 billion interest payment due Wednesday.

The measures will free up $102 billion in cash to pay interest and principal due on outstanding government securities and fund other obligations. The Treasury will dip into two retirement funds for federal employees, essentially replacing some of the government securities the funds hold -- and which count against the $4.9 trillion debt ceiling -- with IOUs that are not counted. He will then use the extra space under the limit to issue short-term securities to raise the necessary cash.

The most immediate concern is the spending legislation, and this morning House Budget Committee Chairman John R. Kasich (R-Ohio) and Domenici along with the ranking Democrats on the two committees will meet at the White House with Panetta and other administration officials. If progress is made toward a compromise, the leadership will return for another session with Clinton.

Federal employees were to report to work this morning as if it were a normal workday. Alice M. Rivlin, director of the Office of Management and Budget, told agency heads that if it appears the president and Congress are likely to agree on a spending measure today, employees will not be sent home. But if it appears unlikely the legislation will be passed, the White House will order the partial shutdown. CAPTION: WHAT THE FIGHT IS ABOUT

The budget battle roiling the Federal government is being fought over three bills in which the Republican Congress is in a test of wills with Democratic President Clinton. Following are summaries of the bills: BILL

DEBT LIMIT EXTENSION; Clinton vetoed this bill yesterday morning. PURPOSE OF BILL

It would have raised the Treasury's borrowing limit by $67 billion to $4.967 trillion, through Dec. 12. There is no set time for the government to bump up against the debt limit but unless the Treasury secretary takes extraordinary action, it cannot meet $25 billion in interest payments due Wednesday. CLINTON'S REACTION

Clinton said the bill was unacceptable because it ties the hands of the Treasury secretary to juggle accounts and prevent the government from defaulting and includes unrelated provisions such as one making it more difficult for the government to issue regulations on health and the environment. BILL

CONTINUING RESOLUTION; The Senate sent it to Clinton late yesterday. PURPOSE OF BILL

This bill allowing the government to spend money on its operations until Dec. 1 is needed because Congress is behind in passing its regular appropriations bills for fiscal 1996, which began six weeks ago. CLINTON'S REACTION

The president has vowed to veto it because it raises some premiums for Medicare, the health program for the elderly, and cuts overall spending to levels he says are too low. BILL

BUDGET RECONCILIATION; Republican congressional leaders hoped to complete and vote on this mammoth measure and send it to the president by week's end. PURPOSE OF BILL

The framework for bringing the nation's budget into balance by 2002, the bill cuts back benefits to poor children and pregnant women, the elderly, the disabled, low-paid workers, farmers and students. It also cuts taxes $245 billion over seven years. CLINTON'S REACTION

Clinton has vowed to veto it. Congress is unlikely to be able to override this veto, meaning much of the Republican budget plan will fall. APPROPRIATIONS BILLS: Only two of the 13 annual spending bills, which provide money for the federal government's ongoing operations in fiscal 1996, have been passed by Congress and signed by Clinton. Because work on the bills was not finished by Oct. 1, the beginning of the government's fiscal year, Congress passed a continuing resolution which expired at midnight last night. So far, the president has signed into law bills funding the Agriculture Department and military construction projects. CAPTION: BATTLE OF THE BUDGET A Washington Post-ABC News Poll

Q. There's a possibility the federal government might have to shut down in the next few days because the Clinton administration and the Republicans in Congress can't agree on a plan to keep it running while they work on a new budget. Whose fault do you think this mainly is -- Clinton's or the Republicans in Congress? Clinton

27% Republicans in Congress

46 Both

20 Neither


Q. Do you think the Clinton administration is honestly trying to resolve the budget issue, or is it just playing politics? Trying to resolve issue

45% Playing politics


Q.Do you think the Republicans in Congress are honestly trying to resolve the budget issue, or are they just playing politics? Trying to resolve issue

33% Playing politics

65 Note: Percentages may not add to 100 because the responses of those with "no opinion" have been omitted. The results of this Washington Post/ABC News national survey are based on telephone interviews with 1,005 randomly selected adults, conducted Nov. 10-13. The margin of sampling error for the overall results is plus or minus 3 percentage points. Sampling error is but one of many potential sources of error in this or any other opinion poll. Interviewing was done by Chilton Research of Radnor, Pa. CAPTION: After their meeting last night with President Clinton, House Speaker Newt Gingrich, left, and Senate Majority Leader Robert J. Dole speak to reporters outside the White House. House Majority Leader Richard K. Armey is at center.