In Search Of The Real Deal (5/15/97)
Clinton Touts Specific Plan Reached To Balance Budget
GOP gets precise on tax cuts; Archer says he'll back the plan
WASHINGTON (AllPolitics, May 16) -- After two weeks of fears the recent budget pact might disintegrate, the White House and congressional leaders have announced they have reached agreement on a more specific plan to balance the budget by 2002.
"Last night we took the next significant step toward writing the spirit and substance of that agreement into the law," President Bill Clinton declared today from the White House Rose Garden, flanked by his budget team. "I say to all members of Congress of both parties: take this balanced budget agreement and write it into law." (416K wav sound)
Clinton said the plan contained the largest "investment" in education in 30 years, and claimed an additional five million poor children would get health care, all while providing tax relief to the middle class. He also cited the clean-up of 500 toxic waste sites.
White House and congressional negotiators shook hands on the outline of a budget agreement May 2, and since then, whether the pact would hold up seemed much in doubt. Just on Thursday, Senate Budget Committee Chairman Pete Domenici (R-N.M.) conceded there was a "danger" the deal could unravel.
But today he was enthusiastic once again, saying "the American people are the winners here today."
Medicare will be solvent for 10 years, Domenici told CNN following Clinton's remarks. Touting GOP priorities, the New Mexico Republican said government spending would be reduced by $1 trillion over five years, all while reducing Americans' tax burden "permanently" by $135 billion. And, he contended Republicans had forced Clinton to give up "well over half of his new initiatives."
"Most important to those that wonder whether this is real, the appropriated accounts of our government will go up only one half a percent each year, and they will be implemented by enforceable, mandatory caps," Domenici said. "So government is getting smaller." (416K wav sound)
A deal to protect the deal
The two biggest issues that had stymied the talks in recent days were the size of tax cuts -- a major Republican issue -- and the amount of new social spending, which was a key issue for the White House and congressional Democrats.
White House negotiators were especially concerned that Republicans were backing away from their May 2 agreement to include $35 billion in education tax credit in the final tax package.
Getting specific on tax cuts
A victory for the White House came when Gingrich and Lott agreed to issue two letters spelling out the tax agreement.
Key portions of one of the GOP leadership letters state: "It was agreed that the net tax cut shall be $85 billion through 2002 and not more than $250 billion through 2007. ... Specifically, it was agreed that the package must include tax relief of roughly $35 billion over five years for post-secondary education, including a deduction and a tax credit."
One White House negotiator told CNN that getting the letters stating clearly that these numbers were "agreed to" was a major turning point in actually finalizing the deal. While Republican leaders had signaled their willingness to include the president's $35 billion education tax credits, one House Republican responsible for actually writing the tax legislation had been refusing to go along with the deal.
Congressional Democrats also insisted on the $250 billion cap on tax cuts. "We weren't worried about the final size of the tax cut in the later years," the White House source told CNN. "But House Democrats were really paranoid about it. They were convinced Republicans were trying to rig the deal to explode tax cuts in the last two years. So we had to get that cap."
House Ways and Means Committee Chairman Bill Archer (R-Texas) had made it clear to both sides that he would not commit to any tax numbers written in to the budget deal. Since the budget resolution is only a framework for committees and not binding, Archer had to commit to the plan for White House negotiators to believe they really had a deal.
Gingrich rips Archer
According to a GOP House leader involved in the talks, the most tense part of the day came Thursday afternoon when Republicans had a closed-door meeting to reach internal agreement on the budget plan. The GOP source told CNN that at one point some members got up to leave the meeting to go to the House floor for a quorum call.
But Gingrich told House Majority Whip Tom DeLay (R-Texas) to block the door and not let any members leave. He then lambasted Archer for blocking the deal. At that point, according to the GOP source, Archer stood up and told members he still had reservations about the tax specifics but was willing to support the deal.
Separate votes for Medicare savings and tax cuts
A White House official involved in the budget talks said that another major issue for the administration was getting Republicans to agree to keep the vote on tax cuts and the $115 billion in Medicare savings separate from the rest of the budget package. The White House official said they started the day thinking that had already been agreed to but then encountered resistance from Lott and Gingrich to keeping the tax cuts separate from the rest of the budget deal.
Republicans are concerned that pairing tax cuts with reductions in Medicare spending will lead to the same political charges they faced in the '96 elections, that Republicans were slashing Medicare to cut taxes. By the end of the day, White House Chief of Staff Erskine Bowles had convinced Lott and Gingrich to keep the tax cuts and Medicare reductions a separate vote.
The two sides also agreed to issue "an addendum" to the agreement, which includes support for such Democratic programs as education grants, national parks, environmental protection and Superfund cleanup sites. But Republicans were able to block other White House requests, refusing to commit funds to such programs as the National Endowment to the Arts, family planning, AmeriCorps and Goals 2000 education program.
Sealing The Deal
The White House source told CNN that sometime after 5 p.m. EDT Thursday, Bowles left a private meeting with Lott and Gingrich to call the president and tell him Republicans had agreed to include most White House priority programs in the budget deal, but were refusing to include support for the Goals 2000 and the White House national service program. Clinton told Bowles to take the deal, saying he had always had to fight for those programs and he was willing to fight for them again at a later date.
Bowles called the president again at approximately 7:30 p.m. to announce they had a deal. Earlier in the day, Clinton told Bowles he had never seen him enjoy his job so much. Bowles reportedly told the president, "I love sealing the deal. That's how I've always made all my money."
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