KWAME HOLMAN: The suspense ended late this afternoon. Amid widespread suspicion the budget talks had collapsed completely, congressional Republican leaders said they'd only been suspended.
SEN. ROBERT DOLE, Majority Leader: My view is that this has been a good faith effort, and it's been a long one, and it's been tedious. It's been frank and candid and many times always a little politics creeps in from time to time, but it's been our view from the start this is about policy and not politics. It's been our view from the start this is about a balanced view over the next seven years, a legitimate balanced budget that we can justify and defend with our colleagues in the House and the Senate, Republicans and Democrats, and we believe we've done that, and I think it's important to understand that maybe the President, he's going to speak, I guess, shortly after we do maybe he believes he's also accomplished that, but we have some fundamental differences. We haven't ironed those out yet. We haven't reached an agreement yet.
REP. NEWT GINGRICH, Speaker of the House: We have until the 26th of January to solve the next stage. One option is that we'll have a successful negotiation. A second option is that we would be able to reach out, as Congressman Armey said, to enough Democrats to form a large bipartisan majority on the Hill. And a third option is we'll find some way to manage a process where we don't have an agreement. We do not want to presume at this stage that we know which of those three options we would take that week.
KWAME HOLMAN: President Clinton spoke at the White House.
PRESIDENT CLINTON: Unfortunately, the talks have not yet succeeded because we do still disagree on the level of cuts in the programs of Medicare, Medicaid, aid to poor children, the earned income credit, which protects the hardest pressed working families, and education and the environment. The Republicans still want cuts in Medicare and Medicaid that we believe are well beyond what is necessary to balance the budget and cuts in the discretionary account which funds education and the environment that we believe are accessible, excessive, and beyond what is needed to balance the budget or to provide a reasonable tax cut. Still, I want to emphasize that we made progress today, the atmosphere was good, it was a genuine bipartisan effort. We are moving closer together on the spending numbers. At the opening of the meeting, we moved and made an initial offer to them. We are clarifying areas of policy agreement, as well as the areas of disagreement, and today we agreed to a recess to last no longer than until next Wednesday.
KWAME HOLMAN: The timeout in the talks came despite some 50 hours of face-to-face negotiations between the President and leaders of the Republican-run Congress. Just last weekend, there was some optimism a deal could be struck after President Clinton released his own version of a seven-year balanced plan long sought by Republicans. Republicans responded by moving their numbers on the most controversial parts of the budget a little closer to those of the President. For example, the President calls for Medicare savings of $102 billion over seven years. The Republicans now would reduce Medicare spending by $168 billion. In Medicaid, the President would slow the growth of the health care program for the poor and disabled by $33 billion, the Republicans $85 billion. And on the contentious issue of tax cuts, the President would give taxpayers $87 billion in breaks, while Republicans would cut taxes by $185 billion, a 25 percent reduction from their original tax cut plan. The numbers represented compromises by both sides, but in recent days, they also were being called final offers. Now, attention turns to the House of Representatives, where Republicans say they'll work to get the votes of conservative Democrats to pass their budget numbers by a veto-proof majority.