$500-Billion U.S. Budget Stalls Over Differences

WASHINGTON — White House and Republican congressional negotiators Wednesday night neared agreement on a $500-billion federal budget that includes President Clinton’s $1.1-billion education initiative to hire new teachers, GOP leaders said.

But in a reflection of the continuing differences between the two sides, top Democrats and senior White House aides warned that some conflicts remain before the deal could be considered final.

“My guess is it will go into [today],” said Erskine Bowles, the president’s chief of staff.

Shortly before midnight, House Speaker Newt Gingrich (R-Ga.) told reporters that negotiators were down to three of four minor issues that should be resolved this morning. These include GOP plans to restrict pornography on the Internet, he said.

Democrats had said earlier that lingering disputes included how to conduct the 2000 census--a politically volatile issue, given that the count determines legislative districts--but Gingrich insisted that the issue had been resolved.

Earlier in the evening, congressional Republicans said that the budget accord was virtually in its final form after weeks of intense negotiations at the Capitol that finally cut through a thicket of politically charged disputes.

“We’re down to basically wrapping up,” said Senate Majority Leader Trent Lott (R-Miss.). “I don’t see any serious snags.”

Lott made his comments as he left the Capitol for the night. He said that key lawmakers--most of whom were in their home states on the campaign trail--were being informed of the accord’s details by telephone and fax. As a result, many of those details were not being released.

The Democrats were less optimistic in their appraisal.

“There’s a lot of things still undone,” said House Minority Leader Richard A. Gephardt (D-Mo.). “Don’t let them fool you [that] we have a deal. We don’t.”

Despite the disagreements over their progress, negotiators are expected this week to complete a budget for fiscal year 1999, thus allowing the 105th Congress to adjourn.

The impact of a new budget will reach into the life of the nation and its economy--through a new $6-billion disaster assistance measure to hard-pressed farmers, grants to help the needy pay heating bills, and $18 billion for the International Monetary Fund to help stabilize a shaky international economy.

The accord would cover funding for most of the federal government for fiscal year 1999, now 15 days old.

It would end a contentious session of Congress that stymied proposals to cut taxes, impose new tobacco regulations, empower managed-care patients, and overhaul campaign finance laws.

Still pending is the impeachment investigation of Clinton, which the House Judiciary Committee is scheduled to take up after the Nov. 3 elections.

Stopgap Measure Extends Deadline

Earlier in the day, both the House and Senate passed the latest in a series of stopgap funding measures to keep the government from shutting down at midnight Wednesday. The latest “continuing resolution” extends the new deadline to midnight Friday. The fiscal year began Oct. 1.

The dispute over Clinton’s education funding proposal had become a major focus of the budget talks in the last few days. Republicans acceded to the president’s request after winning a key concession that gives local school districts a say over how the money is used.

Clinton had demanded that the $1.1 billion be used solely to hire 100,000 new teachers to reduce class sizes in the nation’s schools. But on Wednesday, the White House agreed to GOP demands that school districts have flexibility in spending the money. Under the compromise, the funds could be used for recruitment, training and testing of teachers, as well as for hiring special education instructors.

Gingrich touted this provision at his late news conference, saying that, because of the GOP effort, “Local school boards will decide the types of teachers they need to hire” instead of federal bureaucrats.

Republicans also wanted to allow school boards to spend the money on books and other instructional materials but the White House would not agree to that.

Republicans also prevailed when administration bargainers dropped Clinton’s demand for a nearly $1-billion school construction program.

On a variety of other issues, it quickly became clear Wednesday night that even as negotiators sent out word that an agreement was imminent, details were still being hashed out behind closed doors.

Senate Minority Leader Tom Daschle (D-S.D.) called a news conference to announce a $6-billion agriculture disaster assistance measure, about $1.7 billion more than had been proposed. But he also conceded that many specifics in the broad budget measure were up in the air.

“We’re still negotiating some fine points,” Daschle said.

The debate over the census centered on whether the Census Bureau should be allowed to use statistical sampling as a way to enhance the accuracy of the 2000 census. Republicans strongly oppose use of sampling, arguing that it would violate the Constitution’s language for an actual head count. GOP leaders also worry that it could hurt them politically, since the sampling method most likely would result in a larger count for poor and minority neighborhoods, where most residents tend to be Democrats.

To settle the 2000 dispute, Gingrich said that negotiators agreed to fund the Commerce Department, which oversees the census, only until April 15. By then, the Supreme Court is expected to have ruled on lawsuits challenging the constitutionality of sampling. Also affected by this agreement would be the Justice and State departments, because they are covered by the same appropriations provision.

House Democrats had been vehemently opposed to efforts to postpone settlement of the issue. They want it settled now, according to House Minority Whip David E. Bonior (D-Mich.).

Also unclear was exactly how negotiators had reconciled their differences over two abortion-related issues. One would require federal health insurance plans to cover the cost of contraceptives. The other would bar family planning organizations abroad from using U.S. funds to influence abortion laws.

The contraceptive coverage dispute is significant because the insurance plan for federal employees is widely viewed as a bellwether for other health plans.

Republican conservatives have argued that several methods of contraception--including some birth control pills--interfere with fertilization and therefore cause abortion to occur. As a result, they argue, the federal government should not fund such coverage.

Negotiations were focusing on whether to exempt plans--or individual doctors--objecting to providing the devices for moral reasons. Gingrich said that the final agreement would include provisions exempting physicians who have a moral or religious objection to abortion policies.

Activists Fight Move to Promote Tobacco

On another front, anti-smoking activists were fighting a proposal being pushed by Sen. Lauch Faircloth (R-N.C.) and Rep. Richard M. Burr (R-N.C.) to spend $10 million on promoting the sale of tobacco overseas. As of Wednesday night, there was no decision about whether to include the provision or drop it from the overall spending bill, said an aide to Sen. Richard J. Durbin (D-Ill.).

Congress ended the promotion of American tobacco in overseas markets in 1993 in an effort to bring trade policy in line with health concerns about the potentially harmful effects of smoking.

With Republican negotiators reportedly giving Democrats and Clinton much of what they have demanded on a number of issues, such as the new funding for education, a key question for GOP vote counters is whether such concessions will alienate so many conservative legislators that there may not be enough votes in the House and Senate to pass the gigantic spending bill.

“This could be very, very difficult to get the votes to pass,” said Bonior.

But Gingrich disagreed. “Most Republicans are going to regard this as a strong-defense, strong anti-drug, strong local control initiative,” Gingrich said. “A number of issues our people care deeply about got in there.”

The defense portion of the budget, for instance, contains funding for the B-2 Stealth bomber and more than $950 million toward a national missile defense system. He hailed the defense bill as “the first time since 1985 that we had a peace time increase in defense spending.”

And the appropriations bill for the District of Columbia contains a provision that bars the use of public funds for needle exchange programs, according to an aide to House Majority Leader Dick Armey (R-Texas).

Congressional Republicans and Democrats alike were eager to pass a budget so they can go home to campaign for the Nov. 3 elections. But of late, partisan politics increasingly seemed be intruding on the process.

After weeks of clamoring for the GOP-controlled Congress to adjourn, Democrats were delighted by this week’s focus on serious policy matters--and not the Monica S. Lewinsky scandal.

“There was no hue and cry to go home in our caucus today,” Bonior said. “The vast majority of people want to stay.”

Times staff writers Sam Fulwood III and Alissa J. Rubin contributed to this story.