The White House and Republican leaders neared agreement last night on a massive spending bill that would finance the hiring of new teachers and police officers, increase funding for medical research and complete work on the budget for the federal government this year.
But the two sides broke for the evening unable to resolve one crucial issue: whether to include a small and largely symbolic across-the-board spending cut affecting all federal agencies. The administration is staunchly opposed to such a cut, even the four-tenths of 1 percent the Republicans want, while GOP leaders warn there will be no bill unless one is included.
"We tried as hard as we could to reach agreement, but we didn't reach it," Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said last night as he left a meeting with administration officials at the Capitol. "We're going to try one more time."
While the dispute over an across-the-board cut was the major impediment to a final deal, the White House also warned that a last-minute effort by GOP leaders to overturn a new Agriculture Department milk pricing plan could jeopardize efforts to complete work on the budget. [Details, Page A4.] Still, lawmakers managed yesterday to resolve all the other outstanding issues on the budget, including a new debt relief plan for the Third World. [Details, Page E2.] And GOP leaders predicted the $385 billion package--pulling together five different spending bills--would soon win approval from the House and Senate, as many lawmakers are eager to adjourn for the rest of the year.
"Exhaustion is your friend," said House Majority Whip Tom DeLay (R-Tex.).
Aside from the disagreement over across-the-board spending reductions, the emerging budget compromise represents a kind of time-out in the ongoing struggle over the size and shape of the federal government. There will be no major tax cut, as favored by the GOP, nor dramatic spending initiatives, such as a prescription drug benefit for Medicare beneficiaries promoted by President Clinton. Negotiators were close to a separate agreement last night for a modest package of measures extending expiring tax credits.
Nor will there be sharp cuts in spending, as favored by some rank-and-file GOP lawmakers or prescribed by the 1997 balanced-budget agreement. All told, spending in the 13 annual appropriations bills would grow by $30 billion, or about 5 percent, over last year, according to the Congressional Budget Office (CBO), with the biggest increases in defense, agriculture and transportation.
The net effect of the budget stalemate will be a third consecutive year of budget surpluses and further progress in paying down the $3.6 trillion publicly held national debt--which economists say will strengthen the nation's finances. While Clinton squeezed the Republicans for an additional $6.5 billion of spending this time, it was less than a third as much as he garnered in last year's negotiations and this time he agreed to offset the cost.
The 13 annual spending bills covering salaries and day-to-day government operations and programs constitute about one-third of the $1.8 trillion annual budget and exclude funding for Social Security and other entitlement programs and interest payments on the debt.
Budget experts have roundly condemned some of the tactics employed by the Republicans to make it appear that they will spend less money than they have actually approved. Still, they said, the GOP has altered the political landscape with its pledge not to finance the spending bills with surpluses from the Social Security program. Although the CBO has indicated the Republicans will not meet this goal, the very promise--to which both parties now subscribe--will make it more difficult for future Congresses to launch spending initiatives.
"While the president got the small spending increases he sought, the Republicans can have the satisfaction of knowing that they have shifted the nation's fiscal policy goal from balancing the overall budget to achieving a balance without counting Social Security," said Robert D. Reischauer, a former CBO director.
"I think the Republicans really did get a lot of mud on their face this year with the gimmickry and pork-barrel spending," added Stephen Moore, a budget expert with the libertarian Cato Institute. "But despite all that, the nation is in exceptional fiscal health right now."
As they surveyed the prospective spending deal last night, including eight bills already signed into law, both sides could claim some victory. Clinton received most of the funds he sought to hire more teachers and police, acquire environmentally fragile western land and underwrite the Middle East peace process and international debt relief efforts.
The administration also prevailed over the Republicans in watering down or eliminating a number of mining provisions that the administration said posed serious threats to the environment. Under pressure from rank-and-file members to wrap up talks and adjourn for the year, Republican leaders had little choice but to cave in to administration demands on issues involving oil and gas royalties, mining waste disposal and hardrock mining regulations.
Republicans suffered a number of setbacks this year, including the veto of their major tax cut and the collapse of the 1997 budget restrictions, but GOP leaders could take some solace in the final outcome of the budget talks: They claimed credit for spending more on defense, education, veterans health care and health research than Clinton requested.
They also scored several policy victories, including giving schools more leeway in spending education funds sought by Clinton and new abortion restrictions on international family planning groups. And they avoided the kind of politically disastrous, open-ended negotiations that contributed to the ouster of House Speaker Newt Gingrich (R-Ga.) last year.
"The largest success that we got was we maintained the discipline, bill by bill, that allows us to keep the larger promise of stopping the raid on Social Security," said House Majority Leader Richard K. Armey (R-Tex.), even though the Republicans must rely heavily on accounting gimmicks to make that claim.
The final snag in the budget talks centered on ways to offset the $6.5 billion of additional spending for Clinton's programs. The administration has offered a series of offsetting cuts and savings to close the gap, but the Republicans were insisting on an across-the-board spending cut for all federal agencies. The cut is critical to maintaining the appearance that they are not touching Social Security funds.
Clinton last month vetoed one bill that included a nearly 1 percent across-the-board cut, saying it was a mindless and reckless approach, but Republicans say voters support this approach. They say it would pressure agencies and departments to root out waste.
A frustrated Senate Appropriations Committee Chairman Ted Steven (R-Alaska), responding to White House threats last night, exploded: "My God, I face threats now every day since August."
Stevens said that if the administration is so confident it has gained the upper hand in the talks, as many Democrats have contended, then "why can't they agree to this one little thing?"
For their part, administration officials expressed satisfaction with the outcome of negotiations on the part of the bill funding the Interior Department. Republicans gave way on numerous provisions aimed at slowing down or reversing administration environmental initiatives.
"It's a big win for our agenda," said George Frampton, chairman of the Council on Environmental Quality. "With a lot of hard work we [stymied] many provisions that would have done harm to the environment and added new funds for acquisition of sensitive lands."
Republicans were less jubilant. A spokeswoman for Sen. Slade Gorton (R-Wash.) said Gorton was "disappointed" with some aspects of the agreement, especially the failure to secure even watered-down limits on land surveys that delay logging.
"Whenever we try to do something for our rural communities, it gets scaled back" by the White House, she said.
At the same time, GOP negotiators agreed to allow more than $550 million in federal funds and state aid for the Lands Legacy program, a favorite Clinton initiative that buys scenic land threatened by commercial development.
Staff writers Dan Morgan and Helen Dewar contributed to this report.
Spending Package Highlights
Congress and the White House neared final agreement on spending for fiscal 2000. Overall, the appropriations bills cover roughly one-third of the $1.8 trillion annual federal budget, excluding entitlement programs. Here are highlights of yesterday's agreement and previously approved appropriations:
Education: Congress agreed to $1.3 billion sought by President Clinton to hire more teachers and reduce class sizes, although Republicans insisted that schools could use more of the money than in the past for teacher training. Overall funding for education totals $35.6 billion, a $2.5 billion increase over last year.
Agriculture: Congress approved $8.7 billion in emergency aid to farmers, including $1.2 billion for natural disasters, $5.5 billion for market losses, $125 million for dairy producers and $650 million for crop insurance subsidies. $550 million was added for Hurricane Floyd relief.
Foreign aid: Congress will provide $15.3 billion for foreign aid, including $2.6 billion more sought by the administration for Middle East peace efforts, the states of the former Soviet Union and the World Bank. About $123 million was approved for bilateral debt relief.
Veterans: The budget provides a $1.7 billion increase for veterans' health care, the largest boost since the 1980s.
Defense: The Defense Department will spend $267.8 billion in the coming year, about a 5 percent increase and $4.5 billion more than the president requested. Much of the increase will go for procurement and research. Congress has approved a 4.8 percent pay raise for the military. The budget includes $1 billion to begin testing the F-22 fighter but no money for full-scale production.
Crime, law enforcement and commerce: Congress approved a total of $900 million for the president's program to hire 50,000 more community-oriented police officers, while the Immigration and Naturalization Service received funds to hire 1,000 new Border Patrol agents. Congress approved emergency funding to help carry out the 2000 census.
Environment: Oil companies will have to pay royalties to the government at the market rate for oil and gas pumped from public lands, effective March 15. Congress upheld the Interior Department in limiting the size of mining waste dump sites. Proposed rules for western hardrock mining also will go into effect.
CAPTION: Rep. J.D. Hayworth, left, and House Majority Whip Tom DeLay explain their budget goals.
CAPTION: Rep. Nancy Johnson speaks on budget issues at GOP news conference with Reps. J.D. Hayworth, left, and Tom DeLay.
CAPTION: Senate Budget Committee Chairman Pete Domenici, left, and Appropriations Committee Chairman Ted Stevens discuss their inconclusive negotiations with administration officials last night on spending issues.