Proposal to Recall U.S. Workers Falls Short : Government: Gingrich accepts plan. But Senate Democrats object, citing limits on budget bill debate. Clinton, GOP leaders see progress in their talks.

WASHINGTON —  In a surprise move immediately rejected by Senate Democrats, House Speaker Newt Gingrich (R-Ga.) on Friday threw his support behind a plan to return 280,000 federal employees to work.

The proposal, which stopped well short of ending the partial shutdown of the government, stalled when Senate Democrats complained that it would also limit debate and amendments on any plan on the larger issue of balancing the federal budget in seven years.

On a day when all sides reported some progress in efforts toward a budget compromise, Gingrich agreed to take up a bill to return the temporarily furloughed federal employees to work by reclassifying them as “essential” and guaranteeing their pay. The measure had been introduced previously by Senate Majority Leader Bob Dole (R-Kan.).

But Senate Democrats protested. “It would harm our ability to debate and amend the budget bill” that is the root cause of the government shutdown, explained an aide to Senate Minority Leader Tom Daschle (D-S.D.).

The unexpected shift in GOP strategy came as President Clinton met with Republican leaders to work out their differences on balancing the budget by the year 2002. After a White House session that lasted nearly four hours, Republicans expressed optimism that the two sides are at least starting to narrow their major differences on the budget.

“We had a good working session. We covered a lot of ground,” Dole said. The meeting focused on welfare, food stamps and disability programs.

Gingrich said negotiators “took the first big steps toward the balanced budget.”

Clinton, congressional leaders and their aides planned to meet again Saturday to continue trying to find a solution to the thorny budget fight.

In preparation for Friday’s session, Republican leaders and Clinton administration officials huddled behind closed doors in the Capitol early in the day. Beside each participant was a pile of red folders that outlined positions on a handful of tax and spending issues, including cost-of-living increases in federal programs, tax credits for the working poor and welfare.

Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) quickly struck an optimistic note. “We stand ready and willing to meet as long as is necessary,” he said as he sat next to House Budget Committee Chairman John R. Kasich (R-Ohio).

White House Chief of Staff Leon E. Panetta sounded more cautious.

“There’s no question there are differences,” Panetta said. “We all know what the differences are. The key right now is to try to keep working at it and see what we can do to try to get a balanced budget.”

The two sides are attempting to bridge significant disagreements over the size of a proposed tax cut, spending restrictions for Medicare and Medicaid, the status of Medicaid as an entitlement for all Americans and many other issues.

The Congressional Budget Office has calculated that the GOP plan to balance the budget would yield a $3-billion surplus in 2002, and that the administration’s plan would remain $115 billion in the red that same year.

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The White House has recommended savings of $97 billion in Medicare and $37 billion in Medicaid over seven years, compared to Republican proposals to save $226 billion in Medicare and $133 billion in Medicaid over that period.

After the morning session in the Capitol, Panetta cited “slow but good” progress. “This is tough work,” he said. “We’re slogging our way through each of the issue areas.”

These issues, related to balancing the budget over the long term, have become tangled in the short-term issue of the partial government shutdown that is now two weeks old.

House Republicans have sought to use the shutdown as a lever in the battle over balancing the budget for the long term.

The strategy has appeared increasingly controversial to the public, however, and there were new signs Friday that Republicans were prepared to alter their approach.

“It’s my view that the American people want us to reach an agreement on a balanced budget regardless of party,” Dole said at one point.

Gingrich’s decision to back the plan to return the furloughed federal employees to work surprised many because it was much more conciliatory than the House’s previous hard-line position against ending the shutdown.

After Senate Democrats objected to the plan to bring federal employees back to work, Dole suggested that the approach might be rescued by finding new parliamentary wording that the Democrats could accept.

White House Press Secretary Mike McCurry sounded a similar theme, saying: “The president believes we can work something out.”

McCurry added that Clinton understands the fears of Senate Democrats, who believe that the budget deal will be forced through the chamber with minimal debate.

The measure would do far less than reopen the government entirely, however, because it would not include money to operate the affected agencies and the recalled workers would not be authorized to spend funds that have not been approved in the budget.

In a cryptic hint of movement behind the scenes, House GOP leaders advised members of their chamber Friday to cancel any plans for overseas trips in the near future “until a seven-year balanced budget agreement has been reached with the White House.” Gingrich and House Majority Leader Dick Armey (R-Texas) told members that they could anticipate a number of important votes this week.

But some also wondered if the announcement was inspired by press reports that some members were planning overseas junkets during the shutdown.

Lawmakers who take the trips “ought to be charged with leaving the scene of an accident,” said Sen. Byron L. Dorgan (D-N.D.).