Congressional leaders and President Clinton agreed last night to try to solve their budget differences without using surplus funds generated by the Social Security program, a path that may commit them to a more austere spending plan than the administration has advocated.
House Speaker J. Dennis Hastert (R-Ill.), Senate Majority Leader Trent Lott (R-Miss.) and other leaders emerged from a 90-minute White House meeting with Clinton with virtually none of the partisan sniping that has accompanied the budget debate in recent weeks.
The two sides agreed on a cooperative approach that could lead to a final deal by early next week. While Republican and Democratic participants in the meeting disagreed whether a tax increase of any sort had been ruled out, the president pledged to help the Republicans find offsetting cuts to fund any additional spending he wants.
"The president accepted our parameters--not touching Social Security, not raising taxes," said House Majority Leader Richard K. Armey (R-Tex.). "He . . . committed every bit of effort he and his staff can make towards the completion of the work, and we hope that we can do so by Tuesday night of next week."
Both Clinton and congressional leaders have said they would not dip into Social Security trust fund surpluses, although budget experts say such claims rely heavily on creative accounting tactics. The trust fund has become politically sacrosanct, however, so the congressional leaders and Clinton's top aides agreed they would resolve their budget differences without relying on the program's surpluses.
The Republicans' "key goal is to not spend the Social Security surplus," White House Chief of Staff John D. Podesta said after the meeting. "We said that we share that, notwithstanding the fact that we question whether their gimmicks and numbers add up."
Hastert said consideration of tax increases was "off the table," adding: "Specifically we talked about tobacco tax, but I think it was generally any taxes."
Clinton has proposed an $8 billion increase in cigarette taxes, or 55 cents a pack, to pay for extra spending. The plan has found little support in Congress, as dramatized by a floor vote staged yesterday by House Republicans on all of Clinton's proposed tax and user fee increases. The $19.2 billion of proposed tax increases, as expected, went down--by a vote of 419 to 0.
But Senate Minority Leader Thomas A. Daschle (D-S.D.), who also attended the meeting, told reporters a smaller cigarette tax increase is still possible. "I think the president acknowledged that maybe 55 cents was something the Republicans may not be able to accept, but there's a long way from 1 cent to 55 cents," he said. "And that is still on the table and very much alive."
Legislators and White House aides were vague on how they could manage to craft spending bills acceptable to both sides without relying on the Social Security surplus, something the government has done with little fanfare for years. The Republicans insisted on completing work on the 13 annual spending bills one by one rather than as part of a single giant package; Clinton has signed five of the bills but made it clear he would not sign the rest until he was assured his spending priorities were taken care of.
"The president told the Republicans you can work on individual pieces but we can't agree on any one of them until we see how they all fit together," said a senior White House aide.
White House aides said Clinton would sign the appropriations bill funding the housing and veterans departments, but warned he may veto a $288 billion defense spending bill unless Congress makes further changes.
With both sides committed to averting a government shutdown, Congress approved an eight-day extension of a "continuing resolution," due to expire Thursday, to keep agencies operating. The measure, effective through Oct. 28, was approved by the House, 421 to 2, and by a voice vote of the Senate; it then was sent to the president.
While the two sides are relatively close on overall spending, there remain sharp differences over policies for reducing school class sizes, hiring additional police officers, foreign aid, paying back dues to the United Nations, and oil and mining regulations.
"We think we're pretty close to achieving the goal that we've set out, and now we just got to roll up our sleeves and complete that effort," Lott said.
On Capitol Hill, Republicans were trying to move quickly on the remaining spending bills. As a way of speeding action on their biggest and most controversial domestic spending bill--for labor, health and education programs--they are considering grafting it onto the spending bill for the District of Columbia.
House and Senate leaders also continued to scrounge for more budget accounting tactics to enable them to spend extra money without technically cutting into the Social Security surplus. Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) is pushing a proposal to tap into $240 billion of previously approved but unspent funds for defense, housing and other programs. Stevens said using about $7 billion of those funds for spending this year would be a reasonable alternative to another GOP plan to impose an across-the-board spending cut.
Staff writer Juliet Eilperin contributed to this report.
CAPTION: House Speaker J. Dennis Hastert speaks with reporters after meeting at White House on budget issues.