ROANOKE TIMES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, November 10, 1995                   TAG: 9511100091
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium


DEFAULT BY U.S. `LIKELY'

With a potential federal default and government shutdown at stake, Congress toiled over a pair of budget bills Thursday and lurched ever closer to a jolting veto showdown with President Clinton.

The White House, meanwhile, previewed plans to furlough 800,000 federal workers and freeze federal services.

A day after the House approved legislation to provide stopgap funds for government agencies through Dec. 1, the Senate adopted the measure 50-46 after softening House-approved reins on lobbying by many federally aided private groups. Meanwhile, the House voted 227-194 for another bill extending federal borrowing authority through Dec. 12.

Capping a marathon day, the Senate approved that measure 49-47, and shipped it back to the House after a voice vote to remove language killing the Commerce Department. The House was expected to accept the Senate version of both measures and ship them to the White House today.

All Virginia Republicans in the House voted Thursday to extend the government's borrowing authority, and all Virginia Democrats voted against it.

Administration officials pledged that both bills would be vetoed because of unacceptable provisions, even though the government's abilities to borrow and spend lapse next week.

That declaration prompted furious rhetoric from both sides that almost overshadowed the day's legislative work.

White House spokesman Mike McCurry said that thanks to Republican intransigence, ``default is increasingly likely.'' Bond prices drooped slightly. He added, ``there are no chances at this point'' to avoid federal agencies from having to halt some of their work next week.

Administration officials warned that national parks would close and veterans' checks would be held up unless a stopgap spending bill is passed and signed by midnight Monday.

``When you shut down government services to the people of this country, it is going to have an impact on those who, frankly, are innocent victims of this political debate,'' said Chief of Staff Leon Panetta.

Panetta said 800,000 federal employees across the country would be sent home Tuesday. Employees who provide essential services, such as air traffic controllers, would be exempted - and would work without pay. They would get their salaries after a spending bill passes.

More than half the government's 2.1 million employees would stay on the job.

The shutdown would disrupt a number of government activities, depending on how long the deadlock lasts and whether Congress makes exemptions. Some examples:

No veterans' compensation benefit checks would be mailed out.

National parks and the Smithsonian museums would close. So would the National Zoo.

Environmental regulation, enforcement, research and grant programs would cease.

Among the services not affected: post offices, criminal investigations, border control and inspections, federal prisons, Medicare and medical care at veterans hospitals.

Social Security recipients would receive their checks, but field offices would be understaffed.

Panetta likened the Republican strategy to putting ``a gun to the head of the president,'' adding, ``That's a form of terrorism. We are not going to accept that.''

Treasury Secretary Robert Rubin said he believed he had the authority to use money from some federal trust funds to keep the government functioning ``for some period of time'' that he declined to specify. But he still warned of the GOP borrowing-extension legislation, ``This legislation is not a debt ceiling increase, it is a shortcut to default.''



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