Wiggle Room in the Federal Wallet

GRIDLOCK is gone. Train wrecks are in. But so far, this fall's metaphor - prompting images of President Clinton and his Republican foes engineering their respective political locomotives toward the same intersection - is evoking debate rather than panic.

The first potential wreck, over the funding of federal government operations after Saturday, when the 1995 fiscal year ends, appears already to have been averted. At time of writing, the White House and Congress were near agreement on a temporary spending bill that would keep the government going for six more weeks.

But many other collisions loom. Clinton has threatened to veto most of the 13 appropriations bills, the annual spending bills that set government priorities. Many programs dear to the president's heart - such as his national-service program, education and training programs, and community policing - are either cut or eliminated in the Republican plan.

The so-called reconciliation bill, the measure that could bring dramatic change to entitlement programs like Medicare and welfare, as well as the tax code, also hovers as a major political crash point.

But the biggest potential wreck of all lies in the offing: a bill to raise the legal limit on the national debt. That will be needed by Nov. 15, when the government is projected to run out of money to pay interest on the existing debt.

''Train wrecks are still possible along the way, but not likely until mid-November,'' says Stan Collender, a budget specialist at Price Waterhouse.

For political reasons, a real collision over the debt limit is not likely. If Congress failed to raise the limit, pushing the United States government toward a default on its obligations, the impact would be global. Interest rates could shoot up, the value of the dollar could plummet, and investor confidence would be shaken.

Clinton and Republican leaders know that, and they know voters would not look kindly on any of them for allowing that to happen.

But because of the dire nature of the debt limit, the bill to raise it ''becomes a magnet for legislation Congress is determined to force the President to sign,'' such as the reconciliation and full-year appropriations bills, write Carol Cox Wait and Susan Tanaka of the Committee for a Responsible Federal Budget in a memo to their members.

So for the next six weeks, say budget analysts, expect a game of high-stakes brinkmanship.

Clinton's chief of staff, Leon Panetta, speaking to reporters this week at a Monitor luncheon at the White House, played down the potential of a train wreck. On the question of a US government default, he said, ''I don't think [Republicans] can deliver on that threat.''

Neither side wants the budget battle to go right to the edge, and neither wants a big budget summit, Mr. Panetta said.

In 1990, it was at such a summit that President Bush agreed to raise taxes, a concession that mortally wounded his bid for reelection.

Still, Panetta acknowledges, major issues remain to be ironed out. ''The seven-year balanced-budget time frame is a big issue,'' he says, adding that a big sticking point is the Republican tax cut. To keep his votes in the House, Panetta says, House Speaker Newt Gingrich has to have $200 million in tax cuts.

Clinton has conceded that a balanced budget is a worthy goal, but his proposal calls for a less steep ''glide path.'' Initially he proposed a 10-year course, but after receiving updated economic forecasts has concluded that nine years is possible.

On Tuesday, presidential spokesman Mike McCurry struck a conciliatory tone on the issue of a seven-year path: ''It's important to balance the budget, it's important to provide tax relief to average working families in this country, it's important to protect our commitment to preserve America's environment, and to make investments in education,'' Mr. McCurry said. ''If you can do that and fit it into a seven-year timetable, there's no theoretical reason the president would oppose that.''

But on the reconciliation package, whose elements - entitlements and taxes - bear enormously on the budget deficit, chief of staff Panetta was unequivocal.

''They will have to move toward us on Medicare,'' Panetta said. The Republican plan would save $270 billion over seven years, while Clinton's plan envisions far lower savings.

Perhaps signaling a harmonious start to a highly charged autumn of budget wrangling, the White House has indicated that Clinton will sign the first two appropriations bills to come to his desk: those governing spending on the legislative branch and on military construction.

But as the old fiscal year winds down, the news isn't good for everyone. The Office of Technology Assessment, a congressional agency that evaluates technical and scientific proposals, will shut its doors tomorrow, an early victim of Congress's cost-cutting fervor.