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The Federal Budget Posted September 16, 1995 BACKGROUND: To keep the government funded and running, Congress must approve a federal budget by passing 13 spending bills for each new fiscal year. This year strong differences between an aggressive Republican Congress and President Clinton, who is trying to reassert his authority, threaten to prevent a budget agreement before the new fiscal year begins on October 1. The full House and Senate Appropriations Committees are considering appropriations bills from their respective subcommittees. Citing unduly harsh cuts in domestic spending, the President has threatened to veto much of Congress' budget, and there are not likely to be enough votes for an override. Government agencies would run out of money, forcing them to shut down some operations. The sudden halt brought by such a clash is often referred to as a "train wreck." KEY PLAYERS: A budget will be possible only when the President and Congress make a deal the Republicans will pass and Clinton will sign. Therefore negotiations between Clinton and Senate Majority Leader Bob Dole of Kansas and House Speaker Newt Gingrich of Georgia will determine the budget's fate. Sen. Daniel Patrick Moynihan (D-NY), the Senate's foremost welfare expert, will have a lead role in Democratic deals with the Republicans on the bill. Look for conservative Republican House freshmen to pressure Gingrich not to deal their hard work away, and for Bob Dole's rival for the Republican Presidential nomination, Sen. Phil Gramm (R-TX), to visibly compel Dole to hold the line against Clinton. STATUS Congress is completing work on the 13 appropriations bills that make up the budget. They are: Veterans Affairs, Housing and Urban Development and Independent Agencies; Legislative Branch; Defense; Military Construction; Energy and Water Development; Interior; Treasury, Postal Service and General Government; Transportation; Commerce, Justice and State; Labor, Health and Human Services and Education; Foreign Operations; Agriculture; District of Columbia. The Senate still has several bills to complete. Major entitlements and tax legislation are covered under a separate "reconciliation" bill to be completed later this fall. PRO AND CON: No one is against passing a budget. The dispute is over what sacrifices to make in a time of austerity, and how and when Congress and the President can cut a deal to reach a budget agreement. Republicans, seeking to balance the federal books, are determined to make cuts in domestic spending far deeper than the President will accept. Democrats find the cuts especially onerous in light of the Republicans' proposed increase in defense spending, and their vaunted $245 billion tax cut. "I am willing to reach across the bridge." -- President Bill Clinton "This will not be a Fall of compromise." -- Senate Majority Leader Bob Dole of Kansas. WHAT'S NEXT: Each of the spending bills must go through House-Senate conference and be approved in final form by both houses (only the Legislative Branch bill is complete and ready for the President). Then complicated politics between Clinton and Congress take the fore. A Clinton veto of some or all of the 13 spending bills (probably five or six, including those cutting education, training and foreign aid) would shut down government agencies funded by those bills. Clinton and congressional leaders agreed last week to support a "continuing resolution," (CR) which would keep those agencies temporarily funded during further negotiations. But the deal over the CR could fall apart, sending thousands of federal workers home without pay, although most public services would continue uninterrupted. INSIDE SCOOP: Clinton and the Republicans are in a tricky bind. With the 1996 election looming, neither side wants to capitulate -- particularly rivals Clinton and Dole. But a shutdown of government agencies, while it may have little or no impact on most Americans, would be an embarrassment to both parties and could further shake public confidence in Washington. It is not yet clear which side the public will have more sympathy toward in the event of a shutdown. The winners may be those outside the process who can take a moral high ground, such as independent or "outsider" Presidential candidates, and Senator Gramm, who'll again look to tag Dole as too willing to deal.