Clinton close to budget-deal dream

Within the space of three days this week, President Bill Clinton delivers a State of the Union address and sends a draft 1998 budget to Capitol Hill, which between them might help realise Washington's Impossible Dream - a solid, bipartisan deal to balance the federal budget within five years.

Tonight's State of the Union will contain few sensations, as befits a President who faces a Congress controlled by the opposite party and who won re-election last November by seizing the middle ground of American politics.

It will be Mr Clinton's opportunity to reveal the building bricks of his famous "Bridge to the 21st Century," not so much sweeping proposals as a host of "micro-measures" dealing with the environment, welfare, schools, crime and above all taxes. Thursday's budget will flesh these out with figures, most notably $98bn (pounds 60bn) worth of tax cuts between 1998 and 2002, targeted towards job training, university education and a modest lowering of capital-gains taxes.

His opponents, predictably, seek cuts of almost twice the size, paid for by tighter curbs on the growth of the Medicare and Medicaid federal health programmes. But the gap between the sides is narrowing, and for the first time since they captured Congress in 1994, the Republicans have not declared a Clinton budget "dead on arrival".

Such is the most visible symptom of "bipartisanship," the watchword here since elections whose outcome of divided government was widely taken as a demand from voters for both parties to cease squabbling.

Admittedly, sideshows along the way could derail all. One is the quarrel over a balanced-budget amendment to the Constitution, as vehemently opposed by the Administration as it is pressed by the Republican Congressional leadership. The President has no veto over the proposal, which is within a vote or two of the required two-thirds majority in both Houses. But its passage could destroy today's veneer of brotherhood.

Other hazards are a potential row over federal welfare reform, and the ethics controversies swirling around Speaker Newt Gingrich and Mr Clinton, for his involvement in shady Democratic campaign fund-raising. These dealings will be probed by a Senate Committee, which next week will begin hearings that could degenerate into another White House witch-hunt.

But prospects have never been better for a balanced budget deal. The deficit, at $107bn in fiscal 1996, is the smallest in nearly two decades and Republicans are chastened by the memory of the two unpopular Government shutdowns they forced in winter 1995/96, a misjudgement that launched Mr Clinton on his comeback and re-election.

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