Congressional and White House negotiators reported yesterday that they were making incremental progress toward an agreement on a program of spending cuts and higher taxes to reduce the federal deficit, a move designed to boost confidence on Wall Street.

However, the negotiators who met for more than four hours yesterday in the Capitol cautioned that they were still far from even tentative agreements on specific issues and that the talks may not produce tangible results until next week.

"I'm a little more optimistic. We've made some progress, but we're a long way from a conclusion," said Sen. Pete V. Domenici (R-N.M.), ranking Republican on the Senate Budget Committee and one of 14 members of the congressional negotiating team who may work into the weekend.

"I feel good about it," added White House chief of staff Howard H. Baker Jr., who is representing the administration along with Treasury Secretary James A. Baker III, budget director James C. Miller III, national security adviser Frank C. Carlucci and congressional liaison William L. Ball III.

Yesterday's shirt-sleeve discussions in a room off the Senate floor centered largely on versions of a federal spending freeze because of the administration's view that the talks should first focus on spending restraint rather than higher taxes.

Congressional aides said Treasury Secretary Baker is pushing a proposal to freeze domestic and military spending at last year's levels, which would save as much as $11 billion toward the minimum deficit-reduction goal of $23 billion this year. Baker has proposed that the remainder of the savings be split evenly between higher taxes and revisions in middle-class entitlement programs except Social Security.

Democrats are resisting any approach that relies so heavily on spending cuts, insisting on a more equitable balance with higher taxes.

House Democrats, meanwhile, pressed ahead with plans to vote today on a key part of a deficit-reduction package worth about $14.5 billion, $12 billion of it in higher taxes that primarily would affect corporations and high-income taxpayers. Democrats said they were pushing the measure to a vote as a hedge against possible failure of the deficit summit, but it also serves to keep the administration's feet to the fire in the budget talks.

The Democrats' insistence that the tax bill move forward brought bitter denunciations from Republicans who said it could upset the collegial nature of the talks and send a mixed signal to Wall Street.

"We are generally talking in a bipartisan way {in the negotiations} and then I come back over here and it's the same old partisan crap," said Minority Whip Trent Lott

(R-Miss.) as the House Rules Committee began setting the frame- work for today's debate on the tax bill.

But House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) said, "The only way we can continue our effort to stabilize the markets is to reflect a coherent direction on doing something about the deficit . . . to not continue the process would again shake the trading partners on Wall Street."

House Republicans plan to offer a substitute that would strip all but about $1.3 billion of the higher taxes from the bill and save $11 billion via a spending freeze.

There were some indications yesterday that the budget talks could yield more than the minimum goal of $23 billion, a figure that would be achieved automatically if the summit collapses because the Gramm-Rudman-Hollings law would trigger across-the-board cuts of that amount next month.

"There is a recognition that we have a chance to be bold this time, driven by market imperatives," said Sen. J. Bennett Johnston (D-La.), one of the negotiators. "There is an underlying feeling that we have to do it this time because the markets are really looking at what we are doing and we are very conscious of what the markets are doing."

A bipartisan group of House members is separately pushing for a deficit package that would save more than $40 billion in fiscal 1988 by freezing spending at last year's levels, raising $12 billion in taxes, slowing the increase in entitlement payments and eliminating federal pay raises and cost-of-living adjustments for federal benefit programs.

In a letter to President Reagan and House leaders, the lawmakers said that "the economic developments of the past week reaffirm our conviction that we need to make significant changes in our nation's spending and taxing policies to reduce our federal budget deficit."

Nearly half of the Senate urged budget negotiators to press for more than $23 billion in deficit reduction. A letter from Sen. Kent Conrad (D-N.D.), signed by 44 other senators, said, "It is absolutely essential, in the aftermath of the stock market's turbulence, to send a strong signal to the financial world that the federal deficit is going to come down on a year-to-year basis."

A key House budget aide said there is a "good possibility" that the talks that began Tuesday could produce a package that would reduce the deficit by $30 billion in the first year without resorting to one-time measures such as asset sales.

The aide predicted that some Democrats may be receptive to a modified spending freeze that protects cost-of-living adjustments for beneficiaries of many federal programs and for welfare recipients. "It will be closer to slush than a freeze," he said.

The tax bill to be voted on today includes special exceptions from last year's tax revision law for 93 specific companies and interests. Among area beneficiaries are Georgetown University, Howard University and several trade associations in Alexandria, Bethesda and Lanham -- all of which would get easier treatment for some of their tax-exempt bonds.

Another exception, related to accounting for tax losses, would benefit Mars Inc. of McLean.