Clinton holds budget aces

The President may turn the tables on his foes as the day of reckoning looms, writes Rupert Cornwell

Washington - President Bill Clinton yesterday vowed he would veto Congressional tax and health-care reform plans, presenting himself as the last line of defence against an extremist Republican party. It is a strategy which has already given him the initiative in the looming showdown with Congress over the federal budget, and could become a winning formula for his 1996 re-election campaign.

Technically, the moment of budgetary reckoning is still three weeks off. But after a brief flirtation with compromise, the Democratic White House and the Republican majority on Capitol Hill are back on collision course, playing a game of financial chicken which, if neither side yields, could shut down the government and even lead the US into a debt default.

The battle is unfolding on two fronts: the clutch of spending bills for the year 1995-96 which began on 1 October, and a mammoth overall "reconciliation" bill laying out the detailed tax and spending cuts to meet the Republicans' goal of balancing the budget by 2002. All must be on Mr Clinton's desk by 13 November, when the current stop-gap bill authorising government spending expires.

But internal Republican disputes, the leisurely procedures of the Senate and the sheer number of bills to be passed make it unlikely that deadline any longer can be met. Increasingly the Republicans are bogged down in legislative detail, and yesterday Mr Clinton said only three of the 13 spending bills had been finished.

But the real budget wars are over taxes and Medicare, the federal health- care scheme for the elderly, which the Republicans want to cut back by $270bn (pounds 168bn) over the next seven years. The plan was expected to be approved by the House last night, but its fate in the Senate is unclear. The same goes for the $245bn (pounds 150bn) tax-cut package, which Mr Clinton says conceals a $43bn (pounds 27bn) tax increase for poorer Americans.

A year ago Mr Clinton met crushing defeat over his health care reform plan, as Republicans scared voters into believing a bureaucratic government takeover of the country's health system was at hand. This time, roles are exactly reversed.

By taking the axe to Medicare and Medicaid, the separate government scheme for the poor, it is the Republicans who are the reformers - accused by Mr Clinton of mounting a callous and ideologically driven attack on the US social-safety net, all in the name of unneeded tax cuts for the rich. "There's a right way to balance the budget and a wrong way. This is the wrong one," Mr Clinton declared.

And scaremongering is working again. Any honeymoon of ordinary voters with the Republicans after the party's historic sweep of Congress last year is long over, with 55 per cent of respondents in a recent survey saying that the more they heard what Congress was up to, the less they liked it. Asked to choose between tax cuts and "saving Medicare", voters by far prefer the latter.

By contrast Mr Clinton, preacher of change in 1992 but now champion of the status quo, is enjoying his highest approval ratings in months, and in a presidential match-up easily beats the Senate majority leader, Bob Dole, the current leading Republican candidate.

So far the Republican leadership betrays few signs of nervousness. Dismissing Mr Clinton's protestations as "a joke", and insisting that no President would dare veto a balanced budget, Speaker Newt Gingrich says he will deliver the bills at the appointed hour.

Mr Gingrich also seems determined to make congressional approval needed for an increase in the US government's $4,900bn (pounds 3,060bn) debt ceiling conditional on Mr Clinton's acceptance of the reconciliation bill in its entirety. This week the Treasury announced it was scaling back some future borrowings, but the ceiling will still be hit in mid-November. At that point, if impasse continues, the US will default on some bond redemptions, possibly throwing financial markets into turmoil.

But as endgame approaches, Mr Clinton holds the better cards. For one thing Republicans are divided, not least Messrs Gingrich and Dole themselves. Faced with a Clinton veto, the instinct of Republican moderates like Mr Dole would be to cut a deal.

Mr Gingrich, though, is increasingly prisoner of the radical young Republicans who entered Congress last year. He is also learning the lesson of any would-be budget balancer. As the Republican landslide last year showed, everyone wants to get rid of the deficit. As the waning popularity of the Republican Congress now proves, no one wants to pay for it.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Trainee Health & Safety Consultant

£16000 - £20000 per annum: Recruitment Genius: A fantastic and exciting opport...

Recruitment Genius: Project and Quality Manager

£28000 - £32000 per annum: Recruitment Genius: This company is an independent ...

Recruitment Genius: Trainee Sales Executive - OTE £20,625

£14625 - £20625 per annum: Recruitment Genius: This role is for an enthusiasti...

Guru Careers: Financial Controller

£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

Day In a Page

Mullah Omar, creator of the Taliban, is dead... for the fourth time

Mullah Omar, creator of the Taliban, is dead... again

I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

Margaret Attwood on climate change

The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

New Dr Seuss manuscript discovered

What Pet Should I Get? goes on sale this week
Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

The cartoon hedgehog leading the way into a whole new reality

Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
Ants have unique ability to switch between individual and collective action, says study

Secrets of ants' teamwork revealed

The insects have an almost unique ability to switch between individual and collective action
Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

Donovan marks his 50th year in folk

The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

Simulator recreates thrill of F1 circuit

Rory Buckeridge gets behind the wheel and explains how it works
Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

Twitter accused of 'Facebookisation'

Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

Jane Birkin asks Hermès to rename bag

The star was shocked by a Peta investigation into the exotic skins trade
10 best waterproof mascaras

Whatever the weather: 10 best waterproof mascaras

We found lash-enhancing beauties that won’t budge no matter what you throw at them
Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

Diego Costa: I go to war. You come with me...

Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
Ashes 2015: England show the mettle to strike back hard in third Test

England show the mettle to strike back hard in third Test

The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

Charley Hull: 'I know I'm a good golfer but I'm also just a person'

British teen keeps her feet on ground ahead of Women's Open
Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

Our choice is years of Tory rule under Corbyn or a return to a Labour government

Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'