A Bush administration plan designed to cut the fiscal 1991 budget deficit by about $54 billion calls for limiting federal tax deductions for state and local taxes, and a fivefold increase in federal beer and wine taxes, Republican participants in budget talks said yesterday.
But the plan has yet to reach the bargaining table as negotiations between the White House and congressional leaders continued to flounder yesterday amid partisan bickering and blame assessment.
President Bush and his top aides threatened to call a special session of Congress during lawmakers' month-long August recess, and warned that Bush would make a television address to the nation to blame lawmakers if the talks collapsed. Democrats, meanwhile, said the Republican plan, which they have not officially seen, was not a basis for serious bargaining.
Congressional negotiators have virtually given up hope of reaching a budget agreement before they leave for the recess, and discussed cutting the break short to resume talks late next month.
GOP negotiators insisted yesterday that they would not officially propose their plan until the Democrats have a counteroffer. But that is not likely to happen soon, Democratic negotiatiors said. Democratic bargainers met yesterday, but discussed how they would implement a plan in September once they got one rather than trying to get one now.
Meanwhile, political pressures continued to grow against some of the options being considered to cut the deficit. New York Gov. Mario M. Cuomo (D) and 11 other congressional, union, state and local leaders held a news conference here yesterday to warn against tampering with the federal deductability of state and local taxes.
The Republican plan, devised by Office of Management and Budget Director Richard G. Darman and endorsed by GOP negotiators as an opening position, calls for limiting to $10,000 currently unlimited deductions for state and local taxes, according to GOP participants in the talks. That would raise between $1.9 billion and $3 billion in new federal revenue next year, according to congressional estimates.
Sen. Bob Packwood (Ore.), the Finance Committee's ranking Republican, told reporters that nearly 97 percent of those who would be affected by limiting those deductions make more than $100,000 a year and 86 percent of them get more than $200,000 annually.
"If that isn't a tax on the wealthy, I don't know what is," he said.
The proposal also would raise the tax on a six-pack of beer from 16 cents to about 81 cents and that on a 750-milliliter bottle of table wine from 3 cents to 76 cents, the participants said, generating about $7 billion in new federal revenue each year. Federal excise taxes on beer and wine have not changed since 1951.
Half of the savings in the GOP proposal would come from spending cuts and half from new tax revenue and federal fees, as well as anticipated savings in interest payments resulting from the lowered deficit.
As much as $16 billion of the plan's spending cuts are in programs, known as entitlements, that benefit everyone who meets certain conditions. Medicare would take the largest cut, $6 billion.
Military spending would be trimmed by $7 billion -- less than Democrats want -- and domestic and foreign aid programs would be cut $4 billion.
Darman said yesterday that the plan could change. "We're a highly flexible operation," he told reporters.
House Budget Committee Chairman Leon E. Panetta (D-Calif.) said the outlines of the GOP plan were not promising. "We're back pretty much where we were four weeks ago, establishing bargaining positions that move a little in some areas but still leave vast differences," he said. "There's still a lot of posturing going on."
White House press secretary Marlin Fitzwater said Bush had always wanted to complete a budget agreement before September. "We would like to obviously reach an agreement before the recess," he said. "That is the goal certainly that we have and we hope that the Democrats share that general time frame. So there is a possibility that the president would ask the Congress to stay."
A senior official said the White House is "extremely frustrated by some Democrats who don't seem to want to reach an agreement here." The official said some Democratic negotiators are "simply nay-sayers . . . simply won't be part of a negotiating process and in fact are destructive of the process."
The only Democrat the official would name was Senate Budget Committee Chairman Jim Sasser (Tenn.).
That officials were willing to start attacking Democrats two days after Bush and congressional leaders pledged not to criticize each other is a reflection of the administration's fear that the talks will collapse. Asked if that point was near, a senior official said: "We're at the call 911 emergency stage here."
Staff writer Steven Mufson contributed to this report.