Clinton Vetoes Borrowing Bill -- Government Shutdown Nears As Rhetoric Continues To Roil

WASHINGTON - With the clock ticking toward a midnight shutdown, President Clinton vetoed a temporary borrowing bill today and prepared to close most government operations in a jolting political fight with Congress.

House Speaker Newt Gingrich, meanwhile, called once more for Clinton to sit down with Republican congressional leaders to find an agreement.

"We hope at some point the president will decide to talk with us and have a discussion about how to get this solved," Gingrich said to reporters. "I think it's very unfortunate that he is hiding and refusing to discuss with us what would keep the government open."

Clinton today accused Republicans of engineering a budget crisis to further their spending priorities. "This is not the time or the place for them to backdoor their budget proposals," he said.

The bill Clinton vetoed would have extended the government's ability to borrow money beyond the current debt limit, which will be reached sometime this week. Clinton said Republican amendments would strip the Treasury Department of its ability to dip into federal trust funds to avoid a borrowing crisis.

Republican amendments also would limit appeals by death-row inmates, make it harder to issue health, safety and environmental regulations, and commit the president to a seven-year balanced budget.

He also reiterated his pledge to veto a second bill, which would allow the government to keep operating beyond midnight, when most

spending authority expires. A GOP amendment opposed by Clinton would increase Medicare Part B premiums, canceling a scheduled reduction.

Clinton offered his own bills to extend spending and borrowing authority - but without the GOP amendments.

Massive federal furloughs may start at midnight, and federal borrowing could be disrupted Wednesday.

White House chief of staff Leon Panetta talked today with Sen. Pete Domenici, R-N.M., chairman of the Senate Budget Committee.

Domenici later suggested temporarily freezing the Medicare Part B premium at $46.10 a month to avoid the showdown over the stopgap spending bill. The Republicans have been holding out for an increase in January 1996 to $53.50 a month. Clinton favors current law, which would let the premium drop to $42.50.

Under Domenici's idea, the freeze would remain in place for three or four months, the government would not close, and the White House and Congress could continue their debate about eliminating the federal deficit.

Congress approved the borrowing measure Friday, and the Senate planned to ship the stopgap spending bill to the White House today.

A partial federal shutdown looms tomorrow morning, when most agencies' authority to operate would be affected. In all, 800,000 of the 2.1 million civilian workers would be sent home.

The government's authority to borrow will also be depleted, probably Wednesday, although moments after the veto Treasury Secretary Robert Rubin took emergency steps to avoid defaulting on the nation's debt.

The Treasury scheduled securities auctions to raise the money and hinted Rubin would effectively expand the government's borrowing authority temporarily by drawing on two huge government-run retirement funds.

Meanwhile, the White House said Clinton would shorten his trip to an Asian economic summit in Japan this week from six days to just the weekend. GOP leaders had suggested Clinton cancel the visit if the fiscal standoff has not been resolved.

Panetta said that Clinton's foreign policy would not be "held hostage" to GOP intransigence.

Clinton's veto today followed a weekend of tit-for-tat rhetoric.

In separate TV appearances, the GOP leaders said the problems over the short-term bills would dissolve if Clinton pledged to seek a seven-year balanced budget, as Republicans want. They said policy details could be negotiated later.

Panetta rejected that proposal, and countered with his own: Drop the Medicare premium increase, and negotiations on the short-term spending bill can begin.

The fight over both the short-term bills is linked directly to the bigger battle over GOP plans to balance the budget by 2002. On the way, Republicans want to remake Medicare, Medicaid, welfare and dozens of other programs and dispense $245 billion in tax cuts over seven years. ----------------------------------------------------------------- What a shutdown would mean How a government shutdown would affect U.S. federal services and agencies:

Services affected

-- National parks and the Smithsonian museums would close. So would the National Zoo. -- No new food stamps would be issued. -- New money for food packages for women, infants and children would not be available. -- Environmental regulation, enforcement, research and grant programs would cease. -- No veterans compensation benefit checks would be mailed out.

Services unaffected

-- Post offices, criminal investigations, border control and inspections, federal prisons, medical care at veterans' hospitals and Medicare. -- Air-traffic controllers, meat inspectors would keep working. -- Social Security recipients would receive their checks, but field offices would be understaffed.

ASSOCIATED PRESS. ----------------------------------------------------------------- A three-part budget battle

The budget battle roiling the U.S. government today was being fought over three separate bills in which the Republican Congress is in a test of wills with Democratic President Clinton.

Following are details about the three bills.

Debt-limit extension: This bill, which Clinton vetoed today, would have raised the government's borrowing authority by $67 billion to $4.967 trillion, through Dec. 12.

Clinton said the bill was unacceptable because it ties the hands of the Treasury secretary to juggle accounts and prevent the government from defaulting on $25 billion in interest payments due Wednesday.

Continuing resolution: This bill allowing the government to spend money on its operations until Dec. 1 is needed because Congress is behind in passing its regular appropriations bills for fiscal year 1996, which began six weeks ago.

The Senate was expected to send it to Clinton later today, but the president has vowed to veto it because it raises some premiums for Medicare, the health program for the elderly, and cuts spending to levels he says are too low.

Budget-reconciliation bill: GOP congressional leaders hoped to complete drafting a compromise of Senate and House versions of this mammoth measure today.

The bill is the main vehicle for bringing the nation's budget into balance by 2002. Clinton has vowed to veto it.