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January 23, 1996

GOP MULLS SHUTDOWN LEGISLATION, MAY NOT LIFT DEBT CEILING SOON

By ALAN FRAM
Associated Press Writer

WASHINGTON (AP) -- Republican congressional leaders searched Monday for a way to avoid a new federal shutdown at week's end, but showed little desire to heed President Clinton's pleas for a quick extension of the government's borrowing authority.

Eager to avoid election-year blame for a third partial closure of federal agencies since November, top Republicans hoped for congressional passage as early as Wednesday of legislation keeping programs functioning for perhaps another month. Without such a bill, dozens of agencies would once again have to put some operations in mothballs after the close of business Friday.

The trick for Republican leaders, especially in the House, was balancing conservatives' demands for budget slashes with a bill Clinton would sign. They were considering financing affected agencies at about 75 percent of last year's levels and eliminating some minor programs Clinton might accept -- House Speaker Newt Gingrich said 12 to 15 small agencies might be killed. GOP aides listed one possibility as the Bureau of Mines.

The focus on keeping the government open and on federal borrowing reflected a belief by many Republicans that their effort to reach a budget-balancing agreement with Clinton was probably over. Senate Majority Leader Bob Dole, R-Kan., more optimistic than many, said there was "still some glimmer of hope" that a deal could be completed.

Gingrich, R-Ga., was more blunt.

"Since the budget negotiations are for all practical purposes not functioning ... we're trying to work for first of all how to get a down payment to get to a balanced budget," Gingrich told reporters.

Dole predicted that Congress and the president would approve a bill keeping the government open, but in a way that was true to the GOP struggle for a seven-year balanced budget.

"Our responsibility this week is clear: Keep faith with our principles, keep our word to the American people, and also keep faith with federal employees, who shouldn't be the pawns in this game," Dole said on the Senate floor.

But GOP leaders said there would probably be no quick congressional action to extend the debt limit, without which administration officials have said an unprecedented, jarring federal default might occur.

Dole said the Senate would not consider a debt-limit measure this week, and House leaders said they saw no reason to push such legislation soon. In this parallel track of their budget battle with Clinton, Republican leaders seemed willing to call the administration's bluff, citing warnings of imminent default by Treasury Secretary Robert Rubin in recent months that have not borne out.

"Putting default in play isn't what anybody wants, but none of us feel right now that that's a possibility," said Rep. John Boehner, R-Ohio, a member of the House GOP leadership.

Gingrich said that if a debt-limit extension is sent to Clinton, the president would have to accept limits on future spending -- or the impasse over borrowing would continue.

"He has an obligation to put on the table what substantial reforms he is prepared to sign as part of getting a debt ceiling, and in the absence of that frankly we are temporarily at an impasse," Gingrich said.

With no authority to borrow more money to pay government bills, Rubin has said he will have to take extraordinary steps to make interest payments in mid-February. Since the $4.9 trillion debt limit was reached in November, Rubin has kept the government afloat by using money from federal retiree pension funds and depositing federal IOUs in its place.

Just as the White House's most effective budget attack on Republicans has been to accuse them of demanding extreme cuts in Medicare, Medicaid and other social programs, the administration responded in kind to the GOP's plans on federal borrowing.

"I don't think we should default on the debt," Clinton told reporters. "I think that would be a terrible mistake. It would be an unacceptable thing for a great nation to do and we've never done it."

In televised remarks Sunday, House Majority Leader Dick Armey, R-Texas, said the House would probably attach budget-cutting provisions to such a bill "or it won't go through."

On Monday, White House spokesman Mike McCurry called on Dole and Gingrich to repudiate Armey's comments, saying, "They jeopardize the economic security of the United States."

Gingrich and Dole did not repudiate Armey. Armey himself told reporters, "I don't care what McCurry said about me. I have to tell you I'm not all that excited about the reliability of what comes out of the White House."

Dole's opposition to a third government shutdown echoed his sentiments during the first two, when he publicly expressed reticence about the closures. House leaders had been adamant about using the shutdown as a tool for pressuring Clinton to accept a budget-balancing pact, but Dole decided that the tactic was backfiring on the GOP.

The first shutdown lasted six days in November and idled 750,00 workers. The second, a 21-day closure that ended in early January, came after some additional spending bills were enacted, but still kept 280,000 civil servants at home at 580,000 others on the job but unpaid.




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