Clinton steers for fiscal collision

RUPERT CORNWELL

Washington

President Bill Clinton yesterday set himself fully on course for a showdown with Congress this autumn which will decide not only the fate of the Republicans' proclaimed "fiscal revolution", but possibly his chances of winning a second White House term in 1996.

While the contentious, politically-charged hearings on Whitewater and Waco are occupying the headlines, the real battle on Capitol Hill in the last weeks before the summer recess has been conducted in closed committee rooms. There, Republican legislators have been working out details of the sweeping spending cuts - including healthcare, welfare and education - that will be enshrined in 13 appropriations bills for the 1995/1996 fiscal year, starting on 1 October.

The cuts are the crucial first stage of the Republican grand plan to balance the federal budget by 2002. But Mr Clinton has made it clear he will veto the measures in their present form. Barring compromise, which neither side is ready to countenance, or the even less likely prospect of the Republicans mustering a two-thirds major- ity to override the President, the stage is set for a "train wreck" collision that could shut down whole areas of the government by mid-October.

In the latest of a string of budget speeches yesterday, Mr Clinton sprang to the defence of Medicare, the federal healthcare scheme for the elderly and disabled, which the Republicans intend to slash by $270bn (pounds 170bn) over the next seven years. "We must not balance the budget by cutting Medicare," said the President, whose own proposal to achieve equilibrium within 10 years includes gentler reductions in Medicare.

Thus continues a game of chicken between a Republican Congress committed to a massive reduction in the role of federal government, and a President who entered office promising change, but who now portrays himself as a defender of ordinary Americans and the status quo against the excesses of his ideologically-driven opponents on Capitol Hill. "I must continue to act, alone if necessary, to protect the common ground," Mr Clinton declared this week.

The stakes could hardly be higher. A cave-in by the Republicans would destroy the credibility of the "Contract with America," and its promise to balance the budget and cut taxes. Were Mr Clinton to accept that plan however, he would be acknowledging his own irrelevance to the policy process, and would alienate swaths of his own Democratic voters, barely a year before the election.

But the White House strategy may be starting to pay off. Poll after poll now suggests that the initial public honeymoon with the Republican Congress is over, as its disapproval rating has climbed from under 30 per cent after the November mid-term election to over 60 per cent now.

While support for the broad economic strategy of the Republicans is strong, it fades once the painful spending cuts it entails become apparent. The climax of the struggle will arrive in the autumn. If the 1995/96 appropriations bills are not law by 1 October, a partial shutdown of government could come within a few days.