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Clinton vetoes GOP budget plan

Will offer White House version Thursday

December 7, 1995
Web posted at: 1 a.m. EST

WASHINGTON (CNN) -- President Clinton vetoed the Republican budget reconciliation bill Wednesday, but promised to unveil his own seven-year balanced budget package the following day.

Clinton said his veto would end "extreme Republican efforts to balance the budget through wrongheaded cuts" and clear the way for new negotiations with Congress.

President Clinton

"I am using this pen to preserve our commitment to our parents, to protect opportunity for our children, to defend the public health and our natural resources and natural beauty, and to stop a tax increase that actually undercuts the value of work," Clinton said in an Oval Office ceremony.

To dramatize his point, he vetoed the bill with the same pen Johnson used to sign the Social Security Act amendments of 1965, which created Medicare and Medicaid. The pen was rushed to the White House by Federal Express from the LBJ Library in Austin, Texas.

Clinton's rejection of the Republican budget reconciliation measure was witnessed by four families who the White House said would be hurt by GOP cuts.

"We must balance the budget, but we must do it in a way that honors the commitments that we all have and that keep our people together," Clinton said. (213K AIFF sound or 213K WAV sound)

Bob Dole

Senate Majority Leader Bob Dole, R-Kansas, said he found it ironic the president would use the pen that created Medicare to "veto a bill that would have saved it."

"But I guess the president knew what he was doing. He missed a very historic opportunity today to give America its first balanced budget in a generation," Dole said. (170K AIFF sound or 170K WAV sound)

The veto was expected. Republicans and the White House were already negotiating another plan designed by the Clinton administration to balance the budget within the seven-year time frame.

"Now is not the time to derail this movement," Clinton said. "Now the question is, will we get together and balance the budget in a way that is consistent with our values? It is time to finish the job of balancing the budget and do it in the right way."

White House releases details on new plan

Administration sources said the new White House plan would propose milder reductions for Medicare, Medicaid, welfare and taxes and raise spending for education, environment and other Clinton domestic priorities.

The plan retains Clinton's original proposal for saving $124 billion on Medicare and $54 billion on Medicaid. That's roughly $300 billion less in savings than what the GOP had in mind. The plans slashes welfare by $46 billion instead of the $38 billion Clinton had proposed in June under his 9-year balanced-budget plan.

Tom Daschle

Minority Leader Sen. Thomas Daschle (D), D-South Dakota, said Republicans have "no excuse any longer for not coming to the table in good faith and negotiating these priorities. If they wanted to see where the president was going to come down, today will be the day," he said. (255K AIFF sound or 255K WAV sound)

Pete Domenici

Republican Senate budget committee Chairman Pete Domenici said the GOP was ready to "go to work" if the president submitted a credible budget plan. "I'm positive that when we finally get it analyzed by the Congressional Budget Office, it is not going to be in balance. But it might be a positive step forward," he said. (187K AIFF sound or 187K WAV sound)

"We probably won't like what they come up with," said Dole, who added that Clinton told him in a phone conversation about the decision to prepare a plan. "But that's at least a start."

Scant hope for meeting December 15 deadline

Although it seems that budget talks are moving -- albeit slowly -- an agreement may not be signed before December 15, when the temporary spending bill to keep the government running expires.

The negotiators were told Tuesday that the Congressional Budget Office (CBO) may not be able to provide economic forecasts any sooner than December 12. The CBO estimates will be used to measure the deficit and the savings negotiators propose.

Which economic projections to use will likely be a bone of contention . The new administration plan will be based on estimates by the White House's budget office, which provides a more optimistic forecast than the CBO. The budget office would require $475 billion less in savings over seven years to eliminate the deficit. The updated CBO numbers, however, are expected to narrow the gap.

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The Associated Press and Reuters news service contributed to this report.


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