The budget talks between White House and congressional negotiators reached an important turning point last night as Democratic negotiators said they had made major spending concessions but Republican bargainers said large differences remained.

Congressional leaders are to meet today with Treasury Secretary Nicholas F. Brady, White House Chief of Staff John H. Sununu and Office of Management and Budget Director Richard G. Darman to discuss how to proceed.

The day began with an optimistic prediction from House Speaker Thomas S. Foley (D-Wash.) that agreement was possible by late last night between White House and congressional negotiators on a five-year, $500 billion deficit-reduction plan that would save $50 billion in the first year. But the talks at Andrews Air Force Base recessed in confusion last night.

Looming just two weeks away are across-the-board spending cuts -- which could eventually reach $105.7 billion -- that are to take effect automatically in the absence of an accord.

The increasingly bitter dispute centers on issues that have divided the White House and congressional Democrats for nearly a decade: the Democratic contention that the Republicans have skewed the tax system in favor of the rich and the Republican argument that Democratic spending is out of control.

In hopes of countering the Republican position, Democratic negotiators last night made what one party official said was a "radical" reduction in their spending proposal, trimming new domestic items from $146 billion to $33 billion over five years. Insiders said the capital gains tax was the only issue remaining. "The real tough nut left on the table is capital gains," one said.

However, Senate Minority Leader Robert J. Dole (R-Kan.) said the meeting ended with "major differences on dozens of issues," adding, "It's not quite an impasse, but it's pretty close to one."

The areas of disagreement include ways to enforce any five-year accord; a Democratic proposal to expand the earned income tax credit and raise the standard deduction at a five-year cost of $28.1 billion; and whether to allocate cuts in the last three years between military and non-military accounts, officials said.

Democratic bargainers continued to insist that a capital gains tax cut, which they say would disproportionately benefit the rich, must be linked to a boost in taxes on the wealthy.

They proposed effectively raising the individual income tax rate on the richest taxpayers to 33.6 percent from 28 percent, which the administration rejected, sources said.

The administration countered with a plan to limit federal income tax deductions for single taxpayers with adjusted gross incomes of more than $120,000 and married taxpayers filing jointly with incomes over $200,000, sources said. The Democrats rejected that offer.

Frustrated Republicans said yesterday that the Democrats were being unreasonable.

"If they are really concerned about progressivity, they would have taken any number of proposals that amount to a higher tax burden on the wealthier taxpayers," a GOP official said. "But they want us to increase {income} tax rates, and they want to make {President} Bush eat his words on this, and it has nothing to do with trying to find an equitable solution."

Speaking to regional reporters yesterday, Bush urged budget bargainers to "redouble their efforts" to settle their differences, saying, "It really is time now to get an agreement."

Although the negotiators have set a series of deadlines for themselves -- the end of June, the beginning of August, last week, yesterday -- Congress often puts off difficult choices until the last minute, which has not yet been reached.

For many on Capitol Hill, the real deadline does not fall until next month. If nothing is done before Oct. 1, the Gramm-Rudman-Hollings law would mandate $85.4 billion in automatic cuts. That figure was calculated last month by the Office of Management and Budget based on congressional action through Aug. 15.

If no new action takes place in the next two weeks, President Bush would sign an executive order Oct. 15 to make final the cuts, calculated by OMB based on laws enacted since Aug. 15. OMB projects that the final cuts could total $105.7 billion, assuming such congressional actions as renewal of the food stamp program.

But the Gramm-Rudman-Hollings law, like any other product of Congress, can be changed by lawmakers, perhaps putting off tough spending and tax decisions until after the Nov. 6 elections.

Staff writer Ann Devroy contributed to this report.