ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, January 3, 1996 TAG: 9601030074
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: The Washington Post
Declaring ``enough is enough,`` Senate Majority Leader Bob Dole pushed through legislation Tuesday to put the federal government back in full operation. House GOP leaders warned that the bill likely would be rejected there, however, without a breakthrough in the balanced-budget talks.
President Clinton and congressional leaders negotiated for more than three hours Tuesday night as the talks resumed after a New Year's Day break. White House spokesman Mike McCurry read a bipartisan statement saying ``constructive progress'' had been made and that the talks would continue this afternoon. Both sides said no agreements were reached but added that differences over tax cuts and other issues were discussed.
``Now, even some of the more jaded among us feel the potential for a deal is out there,'' one Republican said.
Dole said the group had agreed to ``duck the press,'' although House Speaker Newt Gingrich, R-Ga., did express optimism.
The session resulted in the first discussion of trade-offs and political exchanges to reach agreement. Last week's 13 hours of talks were devoted mainly to establishing opening positions, sources said.
Clinton has told Republican leaders privately that he is willing to reduce the capital gains tax as part of the ``horse-trading,'' White House sources said Tuesday.
Although Clinton has indicated before that he might consider some sort of reduction in the tax, Tuesday marked the first time he has offered it as part of a budget compromise.
``It's an element that the Republicans are insisting upon in the revenue part of a balanced budget, and the president will try to get something in exchange for agreeing to it,'' a senior administration official said.
Sen. Trent Lott, R-Miss., deputy to Dole, said Tuesday that Clinton told him in two telephone conversations the president initiated that he would favor reducing the capital gains tax if other tax and spending issues could be resolved.
Dole, who orchestrated Senate passage of the measure to let the federal government fully resume operations through Jan. 12, voiced growing frustration with House Republican hard-liners who have linked the fate of 760,000 federal workers to the outcome of the talks. The government employees are either furloughed or working without pay.
``I think we made our point,`` Dole said. ``People have been gone from their jobs long enough. Enough is enough.''
His remarks highlight the growing rift between GOP House and Senate leaders and increase pressure on the House to compromise.
The Senate measure, called a continuing resolution, would temporarily provide money for nine departments and 38 agencies and commissions that are still without an appropriations bill for the fiscal year that began Oct. 1. It would allow the government to call back 280,000 employees who have been furloughed without pay, and resume payment of salaries to 480,000 ``essential'' employees who have been working without pay.
Gingrich and House Majority Leader Dick Armey, R-Texas, warned that the Senate-passed resolution would meet strong resistance in the House, where freshmen and other conservatives are hanging tough until Clinton signs off on a budget deal.
They have been insisting that the shutdown continue as leverage to force Clinton and congressional Democrats to agree to a far-reaching plan to cut taxes and balance the budget by the year 2002.
House Budget Committee Chairman John Kasich, R-Ohio, said: ``It's very unlikely any [continuing resolution] is going to pass the House. We see all of this connected to balancing the budget.''
Later, however, after Clinton commended the Senate action at the beginning of the White House meeting, Gingrich appeared to soften his stand. House members would return to Washington today from recess and ``maybe get something done during the day,'' he said. ``I think if we can both get movement on the balanced budget and get the government back to work and paid for ... that it really would be a good step in the right direction.''
Administration officials described the next 48 hours in the budget talks as ``crucial,`` since each side will be determining whether the other is willing to try to bridge the gaps. ``I think that the difference [from earlier talks] is that they're now at a point where they need to start making some trade-offs between those issues if there's going to be an agreement,'' McCurry said.
Officials said Clinton is prepared to compromise on his proposed tax cut but insist the president has little give on Medicare reductions. Republicans have proposed $201 billion in savings in the program; Clinton, $97 billion.
Statements by some House Republicans that they are prepared to compromise on elements of their plan but not on the bottom line of a balanced budget in seven years drew praise from the White House.
The Los Angeles Times and The Associated Press contributed information to this story.
LENGTH: Medium: 94 lines ILLUSTRATION: PHOTO: AP. 2. Bernice Chandler (left) and other furloughedby CNBworkers protest in front of Social Security offices in Woodlawn,
Md., on Tuesday. 2. Sens. Bob Dole, R-Kan. (left) and John Warner,
R-Va., confer on the budget impasse. color.