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Clinton aide warns of storms ahead: Budget Director foresees clashes with Congress as President marks first 100 days in office

ONE OF President Clinton's most senior officials, Leon Panetta, the Budget Director, has warned in startlingly frank terms that several of the administration's most important initiatives, including its budget proposals and an aid package for Russia, may be in terminal difficulties on Capitol Hill.

Mr Panetta, who in speaking out underscored an impression already widespread in Washington that the President's legislative programme is in the doldrums, also suggested that the recently negogiated North American Trade Agreement (Nafta) with Mexico and Canada, for the time being, appears 'dead'.

The White House was forced to play down the significance of Mr Panetta's remarks, to avert speculation of unrest in the Clinton ranks. 'At this moment, everything is moving ahead on schedule,' Dee Dee Myers, Mr Clinton's press secretary, insisted. 'I think that Mr Panetta has a well-deserved reputation for candour and he always speaks his mind.'

Mr Clinton yesterday shrugged off Mr Panetta's remarks. When asked during a morning jog if he was angry with the Budget Director, the President smiled and replied: 'What for?'

Mr Panetta's analysis will augment the expected deluge of analysis and criticism of Mr Clinton's performance so far as his hundredth day in office is marked tomorrow. Some of his popularity ratings have slumped to the lowest level of any US president in history at this stage.

Mr Panetta, who made his points to an invited group of correspondents, indicated he was concerned the President may be pursuing too many legislative goals at once and should instead concentrate his energy initially on his economic package.

Mr Panetta suggested Mr Clinton needed to do a 'better job of picking and choosing the battles he wants to go through'. He recommended that the administration should ensure passage of the budget proposals on the Hill before pressing for approval of plans to overhaul health-care policy, expected to be formally unveiled next month. The White House has insisted it wants those reforms passed before the end of the year.

The House of Representatives speaker, Tom Foley, also suggested this week that the White House postpone the health-care proposals, which are expected to centre on providing insurance coverage for all Americans.

Despite some early successes, notably in persuading Congress to adopt an initial resolution on cutting the federal deficit, the administration was badly damaged by the success of Senate Republicans last week in killing off the President's dollars 16bn (pounds 10bn) jobs-creation programme by filibuster.

Mr Panetta's main concern is that Republican obstruction and hesitation among some Democrats on Capitol Hill may make passage later this year of the detailed budget package, which calls for tax increases and spending reductions, problematic. 'In this business, you can always find an excuse for not having to vote for deficit reduction,' he said.

On Mr Clinton's recent pledges of almost dollars 3bn in US aid to Russia and other former Soviet republics, Mr Panetta suggested the administration had no notion as to where the money could be found. He doubted, moreover, whether Congress would be in the mood to pass the package unless programmes to aid workers at home were approved first.

He left no doubt, however, that he did not expect Congress to pass the Nafta agreement as it stands. Suspicion about the deal, negotiated at the end of George Bush's tenure, has been stirred up particularly by the opposition of the former presidential candidate, Ross Perot, who has been waging a campaign of criticism against the Clinton administration.