An Unyielding Clinton Argues Against GOP Tax Cut

ST. LOUIS — President Clinton worked Sunday to marshal elusive bipartisan support among the nation’s governors for his certain veto of the Republican-sponsored tax cut, declaring himself “not nearly as pessimistic as a lot of people are” that compromise can be achieved.

But showing no sign of yielding, Clinton cast the measure as fiscally irresponsible. In his most extensive response to the Republican plan since Congress approved it last week, Clinton argued that the proposal would produce a return to budget deficits. “If I can stop it, I will,” he said.

Even before the president arrived in St. Louis from a weekend in Little Rock, Ark., a Republican emissary from Congress had anticipated his appeal. Speaking from the summer meeting of the National Governors’ Assn., Sen. Don Nickles of Oklahoma laid the groundwork for the opposition.

Nickles, the Senate majority whip, declared the GOP proposal a “real rate reduction for taxpayers,” and added: “I hope the president will reconsider.

“The president is saying, ‘We want more money so we can spend more money,’ ” Nickles said. “Does he know the bill sunsets in 10 years? How could it be too risky?”

The president’s approach was a shade more aggressive than his previous efforts at cooperation with the governors’ association. It was intended to hammer home to the governors the idea that their state budgets could suffer if federal tax collections are dramatically reduced and that Washington’s spending must be cut to keep the federal budget in balance.

The governors find themselves in a bind. The Republican chief executives on Saturday voiced support for the tax cuts, but they raised a red flag over prospects that they would be asked to turn over to the federal government $6 billion in welfare savings to help pay for them.

“This must be a calamitous staff error, because I can’t believe they would do this to us,” said Gov. Frank Keating of Oklahoma.

The plan that Congress approved would cut taxes by $792 billion over 10 years. It would cut tax rates by 1 percentage point, phase out the inheritance tax, slash the tax on investment profits, ease the so-called marriage penalty and provide other tax breaks to help people meet the costs of education, retirement and health care.

But Clinton argued that the sort of budget deficits and higher interest rates that dogged the nation in the 1980s and early 1990s would return.

“Thirty years from now we’ll wonder what in the living daylights we did with the opportunity of a lifetime,” he said.

The Republican congressional leaders’ unyielding support for the plan and Clinton’s equally uncompromising opposition have set up what is likely to be an angry and largely partisan debate on the course of the nation’s budget and tax policies. Congressional leaders are not sending the bill to Clinton until after their August recess to avoid giving him the opportunity to veto it before they can muster an organized response.

Reinforcing the administration’s argument that the United States can ill afford the sharp reduction in revenue envisaged by the Republicans, Jack Lew, the director of the Office of Management and Budget, dispatched a memorandum Saturday to White House Chief of Staff John Podesta that said the measure would force the federal government to shave $2.4 billion from the budget next year and cut 4% from Medicare two years later.

He argued that mandatory cuts would follow across the federal budget, bringing spending reductions, for example, in veterans education programs, farm credit, crop insurance and enforcement of child support laws, as a result of the dictates of existing deficit-reduction law.

But precisely how the government would trim spending if income from taxes is reduced remains to be worked out.

For all the stark warnings in the White House message, Clinton presented his attack with none of the fiery delivery that he has offered to more partisan audiences in recent days. And the governors responded to his debate-like delivery with tepid applause, interrupting him rarely.

At the end of his visit, the president found himself in conversation with Jesse Ventura, the Reform Party’s new governor in Minnesota. Microphones picked up a piece of the conversation. It was about Ventura’s previous vocation: wrestling.