Top congressional leaders and Bush administration officials met yesterday to try to get budget talks moving as Republican and Democratic bargainers blamed each other for the stalemate in their pursuit of a five-year, $500-billion, deficit-reduction plan that would save $50 billion in the fiscal year that begins Oct. 1.
Democrats insisted that it was President Bush's proposal to cut the capital gains tax rate that brought negotiations at the Andrews Air Force Base Officers' Club to a standstill Monday night.
But GOP participants in the talks contended that large differences on other issues also remain, including the Democrats' reluctance to assure cuts in domestic spending programs over a five-year span.
At the Capitol yesterday, bipartisan congressional leaders met for an hour 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 the next step in the negotiations.
The group, which included House Speaker Thomas S. Foley (D-Wash.), House Majority Leader Richard A. Gephardt (D-Mo.) and Minority Leader Robert H. Michel (R-Ill.) and Senate Majority Leader George J. Mitchell (D-Maine) and Minority Leader Robert J. Dole (R-Kan.), is to meet again today.
"The talks are not collapsed," Gephardt said. "We're just moving them to a different stage."
The final stage of the talks in which the most difficult decisions are made is expected to include Bush, who returns tonight from a campaign swing for GOP candidates in Colorado and California.
Aboard Air Force One yesterday Bush was asked if his commitment to a capital gains tax cut, which Democrats contend would be a boon to the wealthy, was the stumbling block to an agreement. "As far as I am concerned, it is not," he said. Later, in a speech in Denver, Bush insisted: "This is not a tax break for the rich."
But Foley told reporters that "the problem is the insistence of the administration to reduce the capital gains tax." Mitchell called it "the real difficulty and the major obstacle to agreement. . . . The rest would come together quickly."
GOP participants said the differences are broader than that. They include how to enforce any five-year agreement; a Democratic proposal to expand the earned income tax credit and raise the standard income tax deduction at a five-year cost of $28.1 billion, and whether to allocate spending cuts in the last three years between military and non-military accounts.
"To suggest these are all minor things . . . is nonsense," House Minority Whip Newt Gingrich (R-Ga.) said.
Meanwhile, the key elements of a possible revenue component in an agreement have taken shape as the bargainers tentatively agreed to tax increases that would generate $59.2 billion over five years and $12.3 billion in the fiscal year beginning Oct. 1, according to participants. Overall, negotiators want to raise about $25 billion in new revenue next year and as much as $130 billion over five years.
The items in tentative agreement include a 10 percent excise tax on the purchases of such luxury items as expensive cars, boats, and electronic equipment. The tax would be levied on the purchase price in excess of certain thresholds.
Other provisions would raise the 16-cent-per-pack federal cigarette tax to 20 cents in 1991 and to 24 cents in 1993, which would generate $5.9 billion over five years, and a $13.6 billion, five-year increase in excise taxes on liquor, beer and wine.
Staff writer Ann Devroy traveling with Bush contributed to this report.