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Budget Negotiators, Eyeing '96 Elections, May Change Tactics

WHEN balanced-budget talks resume in a week or so, both Democrats and Republicans will be looking even more past their negotiation adversaries toward a prize twinkling in the distance: the 1996 presidency.

Talks have now stretched on so long, and positions on both sides appear to be so hardened, that it may fall to the voters to decide whether the GOP or President Clinton ultimately wins the Great Budget Standoff of '95/'96.

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A compromise solution is still not out of the question. Another upcoming deadline for a possible government shutdown could force exhausted officials to settle their differences - and the president might want everything settled before his late January State of the Union address. Republicans in Congress might be able to force their budget through by co-opting a bloc of conservative Democratic lawmakers.

Still, it increasingly appears as if the large issues of principle at stake in the discussion may be settled by ballots, not back-room deals.

On Tuesday, House Speaker Newt Gingrich alluded to the possibility that no agreement would be reached at all, and negotiators may have to ''find a way to manage'' until voters can break the deadlock in November.

By all accounts, the upcoming elections have already loomed large over the first 50 hours of negotiations. John Pitney, a political scientist at Claremont McKenna College in California suggests the current stalemate could be the result of Mr. Clinton's dipping poll numbers, and allegations of ethical lapses.

In the last week, questions about Hillary Rodham Clinton's role in the Whitewater and ''Travelgate'' controversies have multiplied, and a federal court ruling allowing a sexual harassment suit to proceed against the President has captured headlines.

''This turning point comes at a time when Clinton's political capital seems to be melting,'' Mr. Pitney says. ''The president may have had a chance a few weeks ago, but these [allegations] have made it difficult for him to work with Republicans.''

Pitney suggests that Republicans, sensing a weakness in the Clinton's defense, are plotting to bypass him by negotiating directly with conservative Democrats in Congress.

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''We find, frankly, with a lot of Democrats in the Congress we're finding a common ground,'' Mr. Gingrich said at a Tuesday meeting. ''...And we are hoping to somehow extend it all the way to the White House.''

According to Steven Wayne, a political science professor at Georgetown University, this strategy would allow Republicans to lay claim to the budget triumph, while protecting themselves politically. If voters eventually resent cuts in Medicare, he says, Republicans can argue that despite the president's opposition, Democrats supported the changes, too.

To that end, Republicans have been courting conservative Democrats in the hope of forging a veto-proof coalition. Last week, House Budget Committee chairman John Kasich (R) of Ohio won support from 47 conservative Democrats for a plan that would save as much as $168 billion in Medicare spending.

By easing their figures a little more, Mr. Wayne says, Republicans could lure the six more ''not-so-conservative'' Democrats they would need to override a Clinton veto.

Yet bridging the gaps will not be easy. In Tuesday's proposals, Congress and the president differed by $52 to $66 billion in Medicare spending, $33 billion in Medicaid, 22 billion in welfare, $13 billion in the Earned Income Tax Credit, $160 billion in tax cuts, and $54 billion in discretionary spending.

Even if both sides split the difference on every spending target, they would still disagree on philosophical issues: like whether tax cuts should be targeted to middle-class families; how much incentive medicare recipients should be given to join private health plans; and what role states should play in implementing Medicaid and welfare.

Unless negotiators can agree on a deal before the latest temporary spending measure expires on Jan. 27, another government shutdown could ensue. If the talks succeed, however, budget deficits could be eliminated by the year 2002, a prospect that would please voters and perhaps electrify Wall Street.

But according to Wayne, a balanced-budget agreement could pose stiff consequences for both parties politically. If, for example, Clinton gave significant ground on Medicare for the sake of balancing the budget, he could open himself to more of the charges of political spinelessness that have dogged his presidency. Likewise, if Republicans drop their tax cut to make a deal, they could be chided for violating one of the tenets of their Contract With America.

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