Bush Abandons Tax Vow : He Dumps His 1988 Read-My-Lips Campaign Pledge : Democrats Hail Move to Cut Deficit

President Bush, who won the White House with a “read-my-lips” pledge of no new taxes, conceded today that tax increases must be part of any plan to shrink the mushrooming budget deficit.

The politically charged admission was quickly hailed by Democrats, who had demanded that Bush and his Republican allies share the heat for digging deeper into taxpayers’ pockets during an election year.

Rep. Dan Rostenkowski (D-Ill.), chairman of the tax-writing House Ways and Means Committee, called Bush’s statement “an important step in the right direction,” while the White House said it marks the turning point in sluggish negotiations with Congress to write a plan to reduce the deficit.

“We’re going to have to do some things that are probably not going to be universally popular in dealing with the budget deficit,” House Speaker Thomas S. Foley (D-Wash.) said.

Neither the White House nor congressional Democrats would speculate on what taxes might be raised or what spending programs might be trimmed.

“We’re not willing to give it any definition,” presidential press secretary Marlin Fitzwater said of Bush’s statement. “That’s a matter for the negotiators.”

Some Republicans balked at Bush’s decision, and it quickly became a political target.

Rep. Robert S. Walker (R-Pa.), a member of the House GOP leadership, urged members of Congress to sign a letter opposing any tax increase, arguing that it would “undermine the economy and substantially weaken it.”

Senate Majority Leader George J. Mitchell (D-Me.) said the President had concluded that tax increases are necessary “and we share the President’s view.”

Foley added, “I think someone who is complaining about taxes being raised in the budget summit will have to complain against both parties and the President.”

Deficit estimates have sharply increased since Bush unveiled his budget in January, and red ink may total more than $200 billion in the next fiscal year.

“We’re not interested in who’s first (to mention taxes) and who’s last and who gets the blame for this and that,” Fitzwater said. “Both sides want to move in a bipartisan way to resolve this issue, and this statement is designed to reflect that feeling.”

Budget talks are scheduled to resume Wednesday, and the White House expressed hope for a final agreement by the August congressional recess.

Bush issued his statement after a breakfast session with top congressional leaders and a weekend of meetings between Democrats and White House budget negotiators.

“It is clear to me,” Bush said, “that both the size of the deficit problem and the need for a package that can be enacted require all of the following.”

He listed “tax revenue increases,” cuts in spending for federal benefits as well as reductions in other domestic and defense programs, reform of the budget process and “growth incentives,” a term often used to describe a cut in the capital gains tax rate.