Clinton, GOP Leaders Call Off Budget Meeting

WASHINGTON —  Pushing federal budget negotiations closer to the brink, President Clinton and GOP congressional leaders Wednesday canceled a scheduled top-level meeting after Republicans objected that Clinton had failed to produce a “firm” counteroffer to their latest plan.

After a 40-minute telephone call among Clinton, Senate Majority Leader Bob Dole (R-Kan.), House Speaker Newt Gingrich (R-Ga.) and House Majority Leader Dick Armey (R-Texas), the negotiators agreed to speak further but set no date for their next meeting.

White House aides said Clinton had no plans to produce the kind of full-scale offer that the Republicans are seeking. And Gingrich and Dole are about to leave Washington for weekend political trips.

Consequently, some congressional aides argued that the new postponement, after what was to be a weeklong recess in talks, signaled that the two sides may never formally break off talks--and also might never resume them. Instead, they might simply go about other business.

“The fat lady doesn’t need to sing” for the negotiations to “fade away,” one Democratic aide said.

Both sides tried to avoid appearing as if they were the obstacle when describing the latest developments.

In a statement, the Republican leaders described the telephone conversation with Clinton as “frank and useful” and insisted they were prepared to meet once Clinton proposed “a firm budget offer that moves in the direction of the bipartisan common ground our proposals have established.”

Yet Gingrich, in a speech in Michigan, said the chances for a quick agreement were “somewhere between dismal and very bad” because of differences over Medicare, Medicaid, welfare and tax cuts.

White House officials sought to lay the blame on the Republicans, while insisting that Clinton stood ready to forge ahead to complete a deal.

“We have within our grasp a historic agreement to cut the budget,” said White House Press Secretary Mike McCurry. Yet he acknowledged that the talks’ vital signs were “faint.”

On one point, there was a burst of ill feeling. Dole complained that the White House had released an official photo--picked up by Time magazine--that appeared to show Clinton lecturing Dole, Gingrich and Armey during a negotiating session.

“The president says, well, it shouldn’t have happened . . . but it happened, and it upset the three of us,” Dole told Cable News Network.

The two sides recessed Jan. 9 for what was to have been a one-week break. At that point, although the two sides had narrowed their differences, Republicans still favored curtailing the growth of Medicare spending by $66 billion more than Clinton wanted over seven years, as well as taking $33 billion more out of Medicaid spending and $23 billion more from welfare than Clinton sought.

Republicans also favored granting $110 billion in net tax cuts over the seven years.

Both sides acknowledged that they remained far apart on questions of principle.

After sounding out public opinion in recent days, some officials on both sides have come to believe that neither the voters nor the markets would react violently if the negotiators temporarily gave up on their quest for a deal to eliminate the federal deficit.

A spokeswoman for Armey said that he is convinced “the markets and the public are going to have a much more violent reaction to a bad deal than to no deal.”

A senior Democratic aide said this gradual, silent disengagement seemed to be driven more by the negotiators’ “constraints than their preferences.”

Dole has time-consuming presidential primaries to pursue, he said, and Gingrich is hemmed in by the wishes of conservative members who won’t agree to further compromises.

“The talks may just go into a permanent hiatus, though no one will say so publicly,” he said.