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White House, Congress Restarting Budget Talks Amidst Pessimism

By Eric Pianin and Ann Devroy
The Washington Post
WASHINGTON

The White House and congressional Republicans begin budget and tax cut talks this week in a mood of pessimism, with both sides already pondering the political and practical fallout of not reaching an agreement.

With less than three weeks in which to resolve spending disputes that have bitterly divided Republicans and Democrats for nearly a year, prospects for a quick agreement on a comprehensive plan to balance the budget within seven years appear remote at best.

"My gut feeling is that these are politicians and politics is the art of compromise and somehow they will work out an agreement," Robert D. Reischauer, former director of the Congressional Budget Office, said Monday. "But my analytical side says, `I don't see how the two sides can come together.' "

Congress and the White House face two major tasks before Dec. 15, when the current short-term spending bill funding much of the government expires: First, to finish work on seven of 13 spending bills for fiscal 1996, or agree to a long-term continuing resolution, to avert another government shutdown in mid-December. And second, to try to hammer out an agreement on the GOP's long-term budget reconciliation legislation, including major changes in Medicare, Medicaid, welfare and agriculture as well as tax cuts.

A senior administration official said Monday that an outcome without a reconciliation bill "preserves our priorities, not theirs," in that the major changes in Medicare and Medicaid, the large tax cuts and the changes in the Earned Income Tax Credit, all could fall by the wayside and the status quo for all these programs would remain in effect.

If that happened, the official said, Clinton would still want to work with Congress to see if they could get a negotiated welfare reform bill.

While both sides are committed to bargaining in good faith to achieve a seven-year balanced budget plan, Republicans appear more anxious than Democrats to reach a budget deal.

Republicans pledged during last fall's campaign to balance the budget, scale back the federal government and reduce taxes, and they urged voters to hold them accountable if they failed to deliver. In the event the upcoming talks collapse, Republicans have vowed to make the president's obstinacy a major issue in the 1996 campaign.