Clinton Outlines His Position on Education As Budget Talks Stall

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With budget talks with Congressional leaders at a standstill, administration officials highlighted direct student loans and education spending last week in the first of several planned news briefings to outline President Clinton's negotiating positions.

Negotiators have until Dec. 15 to agree on five outstanding fiscal 1996 spending bills--one of which finances the Department of Education--while also hammering out a long-term budget plan. Failure to reach an agreement on 1996 spending could trigger another partial government shutdown after Dec. 15, when the current stopgap spending bill expires.

In closed-door negotiations, officials said at the briefing, White House officials had told lawmakers that the president could sign the outstanding spending bills if Republicans restored $6.8 billion of the $22 billion they seek to cut from discretionary domestic programs funded by four of the bills.

Mr. Clinton wants to add $4 billion to the total amount allocated for the bill that pays for the departments of Labor, Health and Human Services, and Education. But he did not detail how he would propose to divide the funds.

Republicans broke off the talks until this week on Nov. 23, criticizing the president for failing to lay out a complete budget plan, and for not proposing cuts to offset the funding he wants to add.

"We have the right to see what their budget looks like, but they don't want to show us," Sen. Pete V. Domenici, R-N.M., told reporters.

Mr. Clinton had hoped lawmakers would agree to shift $2 billion from a defense-spending bill. But he signed it without such a pact last week, citing the need to enact a bill before troops leave for Bosnia.

Defending Direct Lending

At their briefing, administration officials focused on a GOP plan to limit the amount of student loans made through the direct-lending program to 10 percent. The program--in which the government makes loans to college students, by- passing private lenders--now handles 40 percent of loan volume.

"Do we kill direct lending to feed the voracious appetites of special interests, which in this case are banks and private lending?" said Deputy Secretary of Education Madeleine M. Kunin.

Republicans say that their plan would save $1.4 billion in direct-lending costs over seven years without reducing access to private-sector loans. However, that savings is based on budgetary "scoring" rules that Democrats and higher-education lobbyists say overstate the cost of the program. (See Education Week, Oct. 11, 1995.)

The direct-lending plan is included in a "budget reconciliation" bill that seeks to cut entitlement programs to help balance the budget in seven years. Congress cleared it Nov. 20; Mr. Clinton is expected to veto the bill this week.

Vol. 15, Issue 14

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