President shuts down U.S. government Congress gropes for new accord on budget deficit

October 06, 1990|By Peter Osterlund and Richard H. P. Sia | Peter Osterlund and Richard H. P. Sia,Washington Bureau of The Sun

WASHINGTON -- The federal government legally shut itself down at midnight, as the White House and Congress remained locked in a high-stakes budgetary standoff.

With the two branches unable to agree on a new budget plan for the 5-day-old fiscal year, federal facilities around the country were to be shuttered today, and all government activities -- save for those related to U.S. military actions in the Persian Gulf and others required to "protect life and property" -- were to come to a halt.

"It is deeply discouraging that the governing body of this country would wrangle with the nation's fiscal affairs for a year and fail," White House spokesman Marlin Fitzwater said last night. "Tonight, we challenge the Congress to act as quickly as possible to send us an acceptable budget."

The shutdown came after President Bush refused to sign a stopgap spending bill adopted last night on a 300-113 vote in the House and later on a procedural motion in the Senate. The legislation would have deferred the shutdown for a week, during which time the nation's elected leaders would have attempted to find a way out of the impasse.

"The president simply feels we've got to quit fooling around," said Mr. Fitzwater. "It just can't be delayed time after time after time."

Mr. Bush's action drew immediate protests from Democrats on Capitol Hill. "I believe that it inflicts needless pain and suffering on thousands of American families, and I don't believe creating that kind of atmosphere enhances the prospects for an agreement," said Senate Majority Leader George J. Mitchell, D-Maine. "In fact, it has the opposite effect."

With a three-day weekend ahead, it appeared that the full effects of the shutdown would not be felt until Tuesday. But the Park Service was preparing to close the Statue of Liberty, the Washington Monument and other tourist favorites for the weekend, if not longer. Moreover, most of the nation's 2.4 million federal workers were ordered to report to work after Monday's federal holiday, though they were advised that they could be sent home after they arrive.

In a memo to federal agency heads, White House Budget Director Richard G. Darman said that only those services needed to "protect life and property" would be permitted to continue in the absence of a budget plan.

Meanwhile, congressional leaders and administration officials involved themselves in a frenetic series of meetings and conferences in an effort to figure out a path to a compromise budget agreement. Congress planned a rare Saturday session to deal with the fiscal crisis and left the door open for further sessions throughout the long weekend.

Early yesterday morning, the House brushed aside the pleas of the president and of leaders in both parties, rejecting 254-179 an agreement unveiled by the president and congressional leaders last Sunday to cut the budget deficit by $500 billion over five years.

Three of the eight Maryland House members -- Roy P. Dyson, D-1st; Helen Delich Bentley, R-2nd; and Kweisi Mfume, D-7th -- voted against the budget package.

That rejection left lawmakers in both parties scrambling to come up with alternative proposals.

"We will of course keep in touch with the White House, but I do not anticipate, and I underscore, do not anticipate, the resumption of anything that would be considered summit talks," insisted House Speaker Thomas S. Foley, D-Wash.

Nevertheless, negotiations among all sides continued, if not in the formal setting of a budget summit, and lawmakers on both sides of the aisle suggested that a spirit of urgency had instilled a new willingness to compromise.

"I think they're looking at something that's doable, reasonable," said Representative Henry A. Waxman, D-Calif., a leading opponent of the rejected budget pact, who argued that its contemplated Medicare reductions were draconian.

Mr. Fitzwater hinted that Mr. Bush would not go out of his way to placate conservative Republicans who deserted him and opposed the budget deal.

He suggested Mr. Bush might be willing to accept a plan tailored more to the concerns of House Democrats, so long as it could win a majority of votes by the midnight deadline.

"Clearly, our first priority is a package that keeps the government operating, that helps the economy stay strong [and] that does the things we think need to be done in terms of economic growth," Mr. Fitzwater said.

Even some of those conservative Republicans suggested they might now be willing to accept an increase in the tax rate levied on the highest-income wage earners in exchange for a cut in the capital gains tax rate -- a trade-off they refused to contemplate just a week ago.

"Changing circumstances have changed our expectations," said Representative Steve Gunderson, R-Wis. "A new package could be written in about 15 minutes."

The outlines for a compromise suggested by House Budget Committee Democrats include an increase in various taxes of $128 billion over five years, versus the $134 billion increase proposed in the original summit agreement. They also suggest a $42 billion cut in the Medicare program over the same period, compared with a $60 billion reduction called for in the failed deficit-reduction pact.

Furthermore, $12 billion of the Medicare savings would come from increased premiums, compared with $30 billion in the agreement, while $30 billion would come from cuts in payments to doctors and hospitals, as called for in the budget agreement rejected by the House.

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