The White House breakfast meeting that broke the deadlock on the stalled budget negotiations and launched President Bush's about-face on the need for new taxes came down to a single word. Ironically the word was not "taxes." It was "me."

Well into the two-hour breakfast, Senate Majority Leader George J. Mitchell (Maine) asked to caucus privately with House Speaker Thomas S. Foley (Wash.) and House Majority Leader Richard A. Gephardt (Mo.). The three Democrats wanted to review the typewritten statement that was soon to be released outlining the components of a budget agreement that is supposed to resolve the political struggle that has continued since Bush's inauguration 17 months ago.

The document included the phrase "tax revenue increases," the first explicit statement from the White House indicating that Bush was prepared to abandon his memorable rhetorical flourish from 1988, "Read my lips: no new taxes." But the three Democratic congressional leaders wanted one more change in the text.

The statement was crafted around a vague, passive introductory phrase: "It is clear that . . . . " What was clear, according to the document, was the need for a package of steps to address the deficit and related problems -- taxes, defense cuts, domestic program cuts, entitlement cuts and "growth incentives."

The Democrats, who had argued from the beginning that Bush had to take personal responsibility for putting taxes on the table, proposed that the statement be amended to read, "It is clear to me that . . . . "

"That's fine," Bush said, according to one of the participants.

Within an hour last Tuesday, the statement had been released to the public, provoking a political reaction that caught the White House unprepared. Officials believed the wording on taxes left Bush some room to wiggle and that the president would be given some credit from Republicans for getting the Democrats to agree to cuts in entitlement programs and other possible concessions.

House Minority Whip Newt Gingrich (R-Ga.) was preparing to hold a whip meeting on Capitol Hill when the statement was posted on the bulletin board of the White House press room. One person who walked into the room for the Capitol Hill meeting said Gingrich was "bouncing off the wall" and "ranting about the supreme stupidity" of the statement. Vice President Quayle, preparing for a news conference in California, also had no advance warning and scrambled to get an interpretation from the White House.

Administration officials spent the rest of the week trying to contain the damage, eventually sending Bush out for a news conference on Friday to explain himself and seek to repair his credibility. But by week's end, officials still were not certain how successfully the president would weather the storm. Bush and his top advisers appeared to have taken a critical step on taxes without a clear strategy for dealing with the political implications of what he had done.

The Tuesday breakfast capped six days of meetings, telephone calls and strategy sessions as administration officials, led by Richard G. Darman, director of the Office of Management and Budget, and Treasury Secretary Nicholas F. Brady, struggled with Democrats and members of their own team to invigorate the stalled talks.

From the time Bush agreed to call for the talks, the Democratic negotiators had insisted that the administration propose a plausible plan for reducing the deficit and, if taxes were required, that the president be first to call for them.

The administration was motivated by a sense that a deficit agreement is critical to avoid grave economic problems that could undermine Bush midway -- or somewhat later -- in his first term. Since Inauguration Day, Darman and Brady had worried together on the need to take steps to reduce the deficit. The problem was made worse by the unanticipated dimensions of the growing savings and loan fiasco and slower-than-expected economic growth. By this spring they realized that the requirements of the Gramm-Rudman-Hollings deficit-reduction act could cause a major disruption of government later this year by forcing Draconian cuts in most spending programs.

The budget negotiations began May 15 at Bush's initiative, after the president assured the Democrats that there were "no preconditions." This was taken as an early signal that Bush would entertain discussion of taxes.

But the talks made little progress; they reached a nadir on Wednesday, June 20, after Darman put on the table a new plan of spending cuts and no additional taxes that the Democrats regarded as a warmed-over version of Bush's January budget proposal.

The reception to Darman's plan triggered a series of private meetings designed to revive the negotiations. On Thursday morning, Darman and Brady met for breakfast with Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) and House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) at the Treasury Department. Later in the day, Gephardt and Darman had a private chat during a break in the previously scheduled budget negotiations. Darman and Brady later held a lengthy discussion with Senate Budget Committee Chairman Jim Sasser (D-Tenn.) and Sen. Wyche Fowler Jr. (D-Ga.). They also held another meeting with Bentsen at his hideaway office in the Capitol.

On Friday morning, Mitchell, Foley and Gephardt met and agreed that they had to get a presidential statement on the need for new taxes as political cover for all Democrats involved in the negotiations, a message Foley conveyed later Friday to Darman and Brady. Until then Darman had floated a series of options for putting taxes on the table that gave Bush a buffer. One called for a Republican member of the negotiating team, Sen. Pete V. Domenici (N.M.), to offer a comprehensive plan that included new taxes.

On Friday afternoon, June 22, Bush called Bentsen. The two Texans are longtime political rivals, but on this occasion they shared an interest in getting the talks going. Bush asked for a favor: Would Bentsen meet with one of the administration officials over the weekend to keep things moving? Bentsen agreed.

That same afternoon Bentsen met with Mitchell and told the majority leader he believed the two sides were making progress. But he emphasized to Mitchell that administration officials "didn't want to get dumped on" if Bush had to abandon his pledge against new taxes.

On Saturday afternoon Bentsen drove to the Eastern Shore of Maryland for a meeting with Brady at his farm. There, during a "walk in the cornfields," he reiterated that it was essential for Bush to meet with the three Democratic leaders to break the impasse.

On Monday Darman met over breakfast with Gephardt; then Darman and Brady saw Mitchell.

The Democrats never wavered in their insistence that Bush take the first step on taxes. Darman, according to congressional sources, said he understood but warned that he might have trouble selling the idea to Bush and to White House Chief of Staff John H. Sununu, whose opposition to taxes and skepticism about the talks were well known.

Republican budget negotiators met with Bush last Monday afternoon but they were not told about what was about to unfold. By late in the day, the Tuesday breakfast meeting had been scheduled. It would include Bush, Brady, Darman and Sununu from the White House; Foley, Mitchell and Gephardt from the Democrats; and Senate Minority Leader Robert J. Dole (R-Kan.) and House Minority Leader Robert H. Michel (R-Ill.).

Despite all the preliminary meetings, there were no agreements in advance of the breakfast. Darman opened it "with a general discussion of the problem and what had to be done, including all the things that were {later} in the president's statement," according to one participant.

Foley followed with "a very effective, concise statement" of the Democratic position that "we weren't going to go forward until the president went forward," a participant said. Mitchell followed, echoing Foley.

During the discussions, Sununu, in what one participant later described as "an awkward moment," criticized the Democrats for lack of progress. But the Democrats replied firmly that the onus was on Bush.

"Why don't you draft a statement right now," Mitchell suggested, according to a participant.

Darman wrote it out in longhand; he and Sununu worked on it for a moment before reading it to the group. The president said it suited him, and the Democrats asked that it be typed. Then they left the room and returned five minutes later with their final proposal to add a "me." Bush said it was fine.

That left the question of how to release the statement. The group agreed that the Democrats would go to the Capitol and hold a news conference and the White House would put out the statement in the press room. Each side promised not to gloat over the concessions of the other. White House press secretary Marlin Fitzwater was called into the dining room and handed the statement by Bush.

Within an hour, Republicans on Capitol Hill were in an uproar. Early (and most subsequent) news media reports emphasized that Bush had reneged on his presidential campaign promise. Gingrich called Sununu demanding an explanation.

Sununu went to the Capitol to tell Republicans the statement was nothing new. Fitzwater continued the administration's confusing interpretation of events by describing the breakfast meeting as a "turning point" in the budget talks and the statement as a reaffirmation of what Bush had said when he launched the talks with his assurance of "no preconditions."

White House officials hoped the storm would blow over in a day. They did not anticipate the ferocity of the news coverage, symbolized by a New York Post headline that said: "Read My Lips: I Lied." Administration officials had anticipated, according to one, that more attention would be paid to specific possible tax increases and less to Bush's personal credibility.

The White House also underestimated the reaction from Republicans, many of whom obviously felt betrayed by their president, who first enunciated the no-new-tax pledge that many others had embraced. Their reaction was exacerbated by Bush's refusal to publicly explain his decision, giving the Democrats a free shot to shape the story.

According to one Republican strategist, the White House was "stunned" by the reaction. Within 24 hours, Bush's advisers had settled on the interpretation they wanted to give the new announcement: It was a demonstration of political leadership. Brady put this spin on events at a White House briefing, and White House officials used it when GOP candidates went to the White House Thursday for photo opportunities with the president. But many of the Republican candidates were not buying. They told Bush, politely, they were not with him on this one.

Thursday brought a renewed debate over what to do. Late in the day the White House decided to postpone Bush's departure for his Kennebunkport, Maine, house so he could hold a news conference Friday morning. There Bush compared himself to Abraham Lincoln, and said he hoped the voters would understand that worsening economic conditions had forced his hand.

By week's end, administration officials recognized they were not out of the woods. Bush had risked his personal credibility with the voters, and many Republicans feared that he had given away the tax issue and gotten nothing in return.

"If both of those don't work out, if he is seen as untrustworthy and unwise, that's dangerous," an administration official said.

Staff writer John E. Yang contributed to this report.