US budget talks fail to bridge party divide

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Washington - Budget talks between the White House and the Republican- controlled Congress broke down again last night, writes Rupert Cornwell. That raised the possibility of yet a third partial shutdown of the federal government when the current stopgap spending resolution expires on 26 January.

Both sides afterwards were doing their utmost to sound statesmanlike, with President Bill Clinton speaking of "real progress" and proclaiming that a final agreement on how to balance the budget within seven years was "within reach".

Bob Dole, the Senate majority leader, described the talks merely as being "in recess" until new proposals came from the White House. Negotiations could resume in a week or so, he implied.

But the familiar stumbling blocks remain: the size of the tax cuts on which Republicans insist, the extent of reductions in the entitlement programmes of Medicare and Medicaid, and Republican plans to slash education and environmental spending. The numbers may be moving closer but the ideological gap is almost as wide as ever - and could increase as the 1996 election campaign heats up.

Republicans now will attempt to circumvent the President by winning the support of enough moderate and conservative Democrats to build a veto- proof majority for their plans.