Dole rejects jobs bill cut of $4 billion Clinton offer fails as 'compromise'

April 17, 1993|By Robert A. Rankin and David Hess | Robert A. Rankin and David Hess,Knight-Ridder News Service

WASHINGTON -- President Clinton backed down a big step yesterday in his test of strength with Senate Republicans, offering to slash the cost of his jobs bill from $16.3 billion to $12.2 billion.

But Senate Minority Leader Bob Dole of Kansas quickly rejected the president's offer, saying that it wasn't a true compromise and still relied unacceptably on borrowed money that would drive up the federal budget deficit.

The exchange left the jobs bill trapped in political gridlock as Mr. Clinton awaits Congress' return from spring break next week.

The stripped-down jobs bill now is more important as a test of Mr. Clinton's political strength than as a question of economics, independent analysts said yesterday.

"I just can't see that it matters in terms of the economy one way or the other," said L. Douglas Lee, chief economist for County NatWest, a global investment bank, and formerly for the Joint Economic Committee of Congress.

That's because the bill's $12 billion would amount to only one-fifth of 1 percent of the $6 trillion U.S. economy.

"We're getting down to the point where you lose it in a rounding error if you're not careful," Mr. Lee said. "But it may be important politically for Mr. Clinton to get something."

The $12 billion measure would generate only about 176,000 jobs over the next 18 months, according to White House aides. The economy already is generating 150,000 new jobs, on average, each month. Each job created by the Clinton bill would cost taxpayers about $68,000, and few would be permanent.

Mr. Clinton offered to trim his jobs bill in a letter to Senate Majority Leader George J. Mitchell, D-Maine.

"I make this recommendation reluctantly, and regret the unwillingness of the minority to let the Senate act on the original legislation," the president wrote. "It is important that we renew our commitment to breaking gridlock and to making government work."

Mr. Dole issued a statement rejecting Mr. Clinton's offer as he campaigned on behalf of a GOP House candidate in Minnesota.

"It isn't a compromise when the president absolutely refuses to pay for his new spending programs," Mr. Dole said.

In his compromise, Mr. Clinton proposed to retain full spending levels for some parts of his original $16.3 billion stimulus bill. Among them: $4 billion for extending unemployment benefits and $1 billion for summer jobs for young people.

But the president offered to cut some other stimulus proposals by 44 percent across the board. The biggest victim would be $2.5 billion heoriginally proposed for community development block grants, which Republicans denounced as "pork-barrel" political payoffs to big-city mayors. Other programs that would be cut included student loans and rural development.

In addition, Mr. Clinton proposed $200 million in new grants to local governments to hire police -- something few Republicans could oppose comfortably.

Mr. Dole said Republicans would support spending $4 billion to extend unemployment benefits, "but if the president wants to have new spending programs, Republicans will continue to demand offsetting cuts in other programs. It's a fundamental difference between Republicans and most Democrats, and it's a principlewe won't compromise."

Mr. Mitchell welcomed Mr. Clinton's proposed compromise but left open whether he would offer it as a Democratic alternative when the Senate returns next week.

Still hoping for a break in Republican ranks, Mr. Mitchell refused to telegraph his next punch in the parliamentary sparring with Mr. Dole.

Under an agreement worked out two weeks ago, before the Senate recessed, each party will be permitted to offer an amendment to the bill after the Senate reconvenes Monday.

Sen. Mark O. Hatfield, R-Ore., the ranking minority member of the Senate Appropriations Committee, said through a spokesman that he "still wants a stimulus package of some sort" and expected to offer a GOP-backed amendment next week. The amendment probably would contain elements from the president's plan but would be financed by offsetting cuts in other programs.

"The only question now is how do you pay for it. That's what we're working on," the Hatfield aide said.

To halt the impasse, Democrats would have to muster 60 votes in the Senate, where they now hold a 57-43 majority. But with defections in their ranks and Republicans holding fast, the prospects for a breakthrough increasingly are dim.

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