White House and congressional budget negotiators yesterday made some progress toward devising a five-year, $500 billion deficit-reduction plan, narrowing differences on key questions, according to sources familiar with the proceedings.
Bargainers want to have an agreement by Tuesday night, when President Bush is scheduled to address Congress.
The budget talks, held in the converted main bar of the base Officers' Club, have been cordial and businesslike, the sources said, in sharp contrast with the discord that marked some of the sessions held earlier in the Capitol.
Further, the bargainers are confronting the difficult issues facing them much more directly than in the earlier meetings, the sources said. The first meeting, which began at 10 a.m. Friday, lasted until early yesterday morning, by far the longest session since the talks began in May.
The march of time may be more responsible for the new spirit than the negotiators' change of location. Bush has vowed to order the $105.7 billion in across-the-board spending cuts required by the Gramm-Rudman-Hollings law if a budget agreement is not implemented by Oct. 15.
During yesterday's bargaining session, the Democratic and Republican teams each put forward their third offers of the talks, all designed to pare at least $50 billion from the coming fiscal year's deficit. More proposals were expected as the talks stretched into last night.
During a late afternoon session from which aides were excluded, the two sides moved closer than they were on Friday on spending levels for the military as well as for entitlement programs, such as Medicare. Nevertheless, sources said, differences remain.
Bargainers appeared to be moving toward the Republican position on military spending, discussing cuts of between $3 billion and $5 billion from the president's January budget request of $303.2 billion, sources said. Democrats had sought to cut that figure by as much as $11.7 billion.
At the same meeting, negotiators appeared to move toward splitting their differences on entitlements. The Democrats' Friday offer had an entitlement cut of $7.2 billion, less than half the administration's desired $15.6 billion reduction.
In Helsinki, where he is accompanying Bush for today's summit with Soviet President Mikhail Gorbachev, White House Chief of Staff John H. Sununu said the administration is not "enthusiastic" about raising energy taxes. The Democrats' initial offer included a 7-cent-a-gallon increase in fuel taxes, with half of the new revenue going to cut the deficit and the other half to build and repair highways, and a phased-in energy tax.
The Democrat's tax proposal also included a 10 percent surtax on incomes higher than $500,000 a year and an end to the anomaly under which the wealthiest earners are taxed at a lower marginal rate than upper-income earners, sources said.
Speaking on CNN's "Evans and Novak," Sununu also said a cut in the rate at which capital gains are taxed, sought by Bush, is "a very crucial part of this budget package."
Sununu's place was taken yesterday by Treasury Secretary Nicholas F. Brady, who just returned from a mission seeking international economic support for the U.S. military presence in the Middle East.
For about an hour yesterday, about two dozen representatives of the American Federation of Government Employees, a union for government workers, marched in front of Andrews Air Force Base's main gate to protest the threat of layoffs for federal workers if the spending cuts go into effect.
"We want to make sure the budget deal is not cut at the expense of federal workers," said John N. Sturdivant, the union's national president. "We're tired of being furloughed, we're tired of being jerked around like a political football."
Many of the 2.4 million federal workers have been notified, as required by law, that they could be furloughed for as many as 22 days in fiscal 1991, which begins Oct. 1.