Clinton, congressional Republicans hold budget talks

WASHINGTON (CNN) -- President Clinton met with congressional leaders from both parties at the White House on Tuesday as Democrats and Republicans sought out bottom-line positions on budget and spending priorities for the coming fiscal year.

In their first bipartisan budget meeting with the White House this fall, congressional Republicans said they didn't expect to make great strides or compromises, but wanted to simply lay down their marker for the final budget battle of the Clinton presidency.

"Until this point, we didn't feel like the administration was really working with us in a way that we can get our work completed. But we had a good discussion, and I think that we spent a lot of our time on the very important issue of paying down the national debt," Senate Majority Leader Trent Lott, R-Mississippi, told reporters after the meeting.

Lott and House Speaker Dennis Hastert, R-Illinois, said they proposed using 90 percent of next year's federal budget surplus to pay down the national debt, using the remaining 10 percent for tax relief and spending increases for education and defense.

"I'm hoping the president will take a serious look at it. That would be probably the best thing we can do for our children and grandchildren," said Lott, who characterized the gathering as a "positive meeting."

Lott said the funds not used for debt reduction would be used to reduce the tax burden on small businesses in the event the minimum wage is increased and to cut the federal telephone tax. He said Republicans would also seek spending hikes for the Department of Defense and for education programs if those funds are allocated directly to the states.

Hastert characterized the GOP proposals "a good middle ground."

"The fact is, you can't negotiate with a wall between two parties. You have to take the wall down and start to talk, and that's what I hope we achieved today," he told reporters.

Republican lawmakers are also hoping to reach agreement on providing immediate relief to low-income seniors on prescription drug coverage for Medicare and a so-called patient's bill of rights.

"It is possible to work together and come up and pass a responsible patients' bill of rights," said Sen. Don Nickles, R-Oklahoma, adding, "I hope that maybe in the next weeks we can get a bill together. I told the president we're willing to talk with him, we're willing to talk with Democrats, other Republicans."

Hoping to avoid a showdown

GOP aides told CNN earlier Tuesday that they hope to make the point that they are for "reform versus roadblocks" -- that the Democrats want campaign issues, not laws, on popular issues.

In terms of the budget, the GOP aides maintain they are being practical. Though part of their credo is to keep government spending down, they understand they will have to spend more than they would like in order to make the final budget battle as quick and painless as possible.

"We know we're going to have to spend more money," one House leadership aide said.

Republican appropriators are anxious to get a specific list from the White House of how much they will have to give to get the appropriations bills signed into law.

Republicans recognize they cannot convince Clinton to go along with a large tax cut and hope to reserve a large amount of federal money for paying down the national debt. That would jam the Democrats between a choice of more government spending or more money for debt reduction.

In a prepared statement, J.C. Watts, the chairman of the House Republican Conference, gave a preview of the GOP spin.

"Since the president has vetoed the last two tax bills we've sent to the White House, we are concluding he does not want common sense tax relief. That leaves us with debt reduction or new spending. We hope the president will come to see that debt reduction is the better choice," he said.

CNN Congressional Correspondent Chris Black and CNN Producers Dana Bash and Ted Barrett contributed to this report.