BUDGET ACCORD DRAWING CLOSER; CONGRESS NEGOTIATES SPENDING PROPOSALS.

Byline: David Hess and Raja Mishra Knight Ridder Newspapers

White House and congressional negotiators verged Wednesday night on a hard-fought agreement for a $500 billion catchall spending bill, striking deals on some of President Clinton's education objectives and on modest Republican-backed tax breaks for farmers, corporations and small businesses.

Details of the accord still were being worked out late Wednesday, and once the deal is sealed the government will remain open for business through next Sept. 30.

The president won a key victory on one of his major education priorities but suffered a setback on a companion issue that he also had set a high value on. He achieved his goal of $1.1 billion to help local schools hire 100,000 more teachers and reduce class sizes in public schools. But his effort to pry money from Congress to build and repair crumbling school facilities in both urban and rural areas was rejected.

The GOP claimed a victory, too, getting a five-year, $5.1 billion tax-cut package to extend research and development tax credits for industry, enable the self-employed to deduct fully their health insurance premiums and permit farmers to ``average'' their income over three years to smooth the peaks and valleys in their earnings.

On the education issue, Republicans agreed to supply the $1.1 billion in new teacher money with few strings attached. The money will be used to help reduce the size of classes in kindergarten through third grade. The president's bid to get $4 billion to help cash-strapped districts build and repair schools reportedly was turned down by GOP negotiators.

Noting that the president had called for the additional teachers January in his State of the Union address, White House chief of staff Erskine Bowles declared Wednesday: ``We've finally come to what we believe is a resolution of this issue, and we will have 100,000 new teachers in our classrooms.''

But House Minority Leader Richard Gephardt, D-Mo., lamented the inability to persuade GOP negotiators to agree to the extra money for rebuilding schools.

Even as deals were cut on education and farming issues Wednesday, negotiators in both parties indicated that some important issues were still unresolved. Bowles said they pertained to some riders on one spending bill that Democrats said would set back environmental protections, as well as a partisan fight over how to conduct the 2000 census. In addition, Bowles said, the negotiators remained at odds over a proposal to require insurers to cover FDA-approved contraceptives for federal workers. House Speaker Newt Gingrich, R-Ga., struck an upbeat note about the progress of the budget talks as he left the Capitol late Wednesday.

No major obstacles

``All the big things are done,'' he said. ``We are down to five very specific, very narrow issues.''

And Senate Majority Leader Trent Lott, R-Miss., said, ``I don't see any serious snag,'' saying the negotiators had reached a tentative agreement but that it would take time to clear it with rank-and-file members, many of whom have returned home to campaign for re-election and are awaiting word from their leaders about the budget deal.

On balance, Democratic leaders welcomed the weeklong budget negotiations as a departure from the earlier fixation on the House impeachment process, which had engulfed the White House and distracted attention from the major issues in the upcoming November elections.

Said Rep. Vic Fazio, D-Calif., a member of the Democratic leadership, ``Most Democrats feel we've had a very productive week. We certainly got the subject back to the issues.''

Still, to get the agreement, Congress and the White House had to extend temporary spending four times to avert a government shutdown. On Wednesday, Clinton signed a 48-hour temporary spending bill. The fiscal year ended Sept. 30, meaning the federal government has been operating under stopgap measures for 14 days.

``As for the way that this was all handled, this is not a way to legislate, this is not a way to enact good policy,'' said Senate Democratic Leader Thomas Daschle, D-S.D.

The agreement included both big and little items. At issue were the myriad topics that divide the two political parties.

Numerous issues

For days they had been fighting over a number of education, abortion, contraceptive, farming and environmental issues - matters that Gingrich had described as ``significant disagreements.''

Even as legislative leaders wrestled with Clinton through the day over the high-profile issues, they settled many of the small disputes - mostly about money but sometimes about policy - in other bills that will be lumped together into the massive $500 billion catchall spending measure.

For example, Rep. Ralph Regula, R-Ohio, chairman of the Interior appropriations subcommittee, said the president had won back $40 million to buy a large ranch in New Mexico and an additional $6.5 million for acreage on the northern flank of Yellowstone Park in Wyoming - both additions to the national park system.

The administration also insisted on a full-scope study to write a master plan for the Columbia Basin ecosystem in the Northwest and ``won that argument,'' Regula said.

Negotiators agreed to give the Immigration and Naturalization Service authority to confer permanent residency status on some 48,000 Haitian refugees in the United States. Florida's two senators - Democrat Bob Graham and Republican Connie Mack - were influential in overturning an earlier decision by the House to deny ``green card'' privileges to the Haitians.

The bargainers also reached agreement on a large ``emergency'' spending bill, which has been rolled into the catchall bill, to provide some $7.5 billion for defense, $6 billion for farm relief and several billion dollars for a variety of other programs, including disaster relief, fixing the computer glitch that could mess up many computers in 2000, and embassy security.

The catchall bill will include legislation sought by the high-tech industry to set aside 142,500 more visas for foreigners with computer skills.

Rep. C.W. ``Bill'' Young, R-Fla., chairman of the national security appropriations subcommittee, said the defense portion of the bill would cover military readiness, intelligence programs, disaster aid, new equipment purchases and $1.85 billion for the Bosnia peacekeeping operation.

CAPTION(S):

photo

PHOTO (color) President Clinton, Vice President Al Gore and White House Chief of Staff Erskine Bowles, right, discuss budget talks Wednesday.

Susan Walsh/Associated Press