RUSSIAN BUDGET STANDOFF CONTINUES.

The standoff continues for a third day today between the Russian government and parliament over the government’s proposals to slash social welfare spending and revise the 1997 budget to make up for massive tax shortfalls. Today, the Duma is to discuss a draft tax code which the government describes as essential to put the country’s finances on a healthy footing. Two days ago the Duma rejected a package of bills that would have reduced or eliminated many of the welfare benefits inherited from the Soviet period. Yesterday, the joint government-parliament commission failed to reach a compromise on the government’s proposed budget cuts; it is to meet again today. In a gesture of defiance, the Duma yesterday gave overwhelming approval to a motion that would raise the minimum pension by 20 percent as of July 1. This is the date by which the government has pledged to pay off all pension arrears. Deputy Premier Oleg Sysuyev said there was no possibility whatsoever that the government could find the money to fund such an increase. (Reuter, June 18-19)

Rumors continue that President Boris Yeltsin might resolve the crisis by dissolving parliament. Pundits have warned that a new parliament would be even more intractable than the present one and pointed out that France’s recent snap election unexpectedly brought a socialist government to power. First Deputy Premier Anatoly Chubais said as much earlier in the week. Yesterday, however, Security Council secretary Ivan Rybkin, a close Yeltsin confidante, muddied the waters by telling the newspaper Kommersant-daily that early elections might be the only way out of the impasse. If new elections are held, Rybkin said, he would favor abolishing the present 5 percent barrier, designed to keep mini-parties out of parliament. (Kommersant-daily, June 18)

The Kremlin hopes that doing away with this hurdle and also, perhaps, with the system of voting by party lists would dilute the Communist dominance in the Duma, but it is by no means certain that this would be the case. The experience of countries such as Britain that eschew proportional representation suggests that, if Russia adopted a first-past-the-post system, the Communist party might end up dominating parliament to an even greater extent than at present.

Primorsky Governor Holds Closed-Door Talks with Rival.