Budget crisis threatens US with shutdown

Clinton vs Congress: Some 800,000 workers sent home early in tug- of-war over finances

RUPERT CORNWELL

Washington

Hundreds of thousands of US government employees, from social security staff and State Department officials to national-parks rangers and White House chefs, were sent home yesterday, as the impasse over the budget caused the second government shut-down in five years.

About 800,000 "non-essential" workers, more than a third of the federal work force, were likely to be affected by the end of the day, many of them having completed the morning commute to work only to be told within hours to go home.

The sole hope lay in new talks between the Republican Congress and a Democratic White House on Capitol Hill yesterday in search of a compromise, to allow a temporary extension of Government spending in the absence of a 1995/96 budget, now six weeks overdue. Last night the prospects of a quick settlement looked remote.

Hours after a first round of discussions broke up without result, President Clinton appeared in the White House briefing room to charge his opponents with "putting ideology before common sense" in their drive to balance the federal budget by 2002. Within minutes Newt Gingrich, the House Speaker, was on TV accusing Mr Clinton of "gross misrepresentation", and the normally mild-mannered Pete Domenici, chairman of the Senate Budget Committee, angrily warned that Mr Clinton had set back the chances of a deal with his "half truths and absolute mis-statements".

As the bickering continued, the vast majority of ordinary Americans - not to mention those laid off as a result - are merely exasperated by the arcane game of political chicken being played out in Washington, which has seen President Clinton veto measures from Congress temporarily to extend the government's borrowing authority and its ability to spend money, because of "unacceptable" conditions attached to them.

The first difficulty seems to have been navigated easily enough, as Robert Rubin, the Treasury Secretary, announced plans to dip into federal pension funds to meet debt repayments on time and avert a government default on international capital markets. The second, however, was increasingly visible yesterday, as entire government agencies put up the shutters for want of money to pay staff.

The Labor Department was sending almost every worker home at 1pm. The State Department laid off hundreds of lesser minions, though not those conducting the Balkan peace talks in Ohio. At the White House, the President, deemed an "essential employee", will still be able to function. But staff in the executive West Wing will be reduced to 90 from 430, and in the residential East Wing from 70 to under 20. There will be only one chef instead of four, and only one butler and usher per shift.

More seriously, the row is starting to interfere with the President's travel plans. A six-day stay in Japan that was to have started today has been compressed to a weekend sprint of summitry on the other side of the Pacific.

If the impasse drags on, Mr Clinton might have to shorten, or even scrap, his visit to Britain and Ireland, starting on 28 November. Officials resolutely reject suggestions that the White House would welcome an excuse to shelve the trip, given the deadlock in the Northern Ireland peace process.

But any inconvenience will be well worth it for Mr Clinton if, as the polls currently suggest, the public blames the Republican Congress rather than the Democratic White House for the shambles. That can only hamper Bob Dole, the Senate leader and front-runner for the Republican nomination, in his quest for the presidency. With every day that passes, Mr Dole is increasingly aligned in the public consciousness with the unpopular Mr Gingrich, fellow leader of the congressional delegation in the discussions with the White House.