Political Cease-Fire Called in Rancorous Deficit Debate

Democrats and Republicans traded barbs over the budget deficit Thursday, but then declared a political cease-fire in hopes of reviving bogged-down negotiations on a $50-billion deficit-reduction package.

Democrats, angered by a House Republican conference vote Wednesday against all new taxes, said that they had sought and received assurances from GOP leaders that this stand would not be an insurmountable obstacle to inclusion of higher taxes in any final agreement.

Republicans, who complained that Democrats were taking partisan shots at President Bush for reversing himself on his famous “no new taxes” pledge, received a renewed promise that Democrats would bargain in good faith.

Thursday’s stormy session by White House and congressional negotiators was the first meeting of the group in a week. It lasted less than 90 minutes. Participants on both sides said that letting off steam was essential to making further progress in the on-again, off-again bargaining.

“We vented our frustrations,” said Sen. Bob Packwood (R-Ore.). “We’re here prepared to make a deal on revenues. We don’t like taxes and Democrats don’t like taxes but we’ll swallow hard and accept them if there are spending reductions that are enforceable.”

“We had to clear the air and that’s what we did,” said House Majority Whip William H. Gray III (D-Pa.). “We’ve had a setback this week and hopefully now we’re back on track.”

While time is slipping by as the self-imposed Aug. 3 deadline for a summit agreement nears, Gray added, it might be possible for the White House and congressional leaders to work out the broad outlines of a budget deal by the end of next week.

The budget talks made virtually no progress this week despite Monday’s announcement that failure to reach agreement would result in automatic spending cuts of $100 billion in the new fiscal year starting Oct. 1. House Majority Leader Richard A. Gephardt (D-Mo.), who is chairing the negotiations, planned to call another meeting Monday.

“Hopefully, the summit is back on track. . . . It’s a cease-fire and hopefully it’ll last until we get an agreement,” said Rep. Leon E. Panetta (D-Carmel Valley).

Sen. Phil Gramm (R-Tex.), who had taken a hard-line position against tax increases in the past, emerged from Thursday’s meeting talking about the need for a bipartisan compromise to deal with a deficit estimated at $168.8 billion in the year starting Oct. 1.

“If we don’t get a compromise adopted in both houses before the August recess, we ought to cancel the recess and stay here and finish the job,” Gramm told reporters.

House Minority Whip Newt Gingrich (R-Ga.), who defended the House GOP resolution against tax increases, said that it did not mean his fellow Republicans would not support a “good summit agreement” even if it contained some tax hikes.

But Gingrich expressed frustration at the pace of the negotiations, saying: “This is baloney. We keep passing large budget-busting appropriations bills (in the House) and act as if the deficit problem will be solved by magic. The summit I’ve been in hasn’t been magic.”

Meanwhile, Bush, speaking late Thursday to a political rally in Boise, Ida., tested partisan Republican waters in the aftermath of his major concession to congressional Democrats on the need for tax revenues--and drew a roar of supportive applause.

It’s Congress, he told the approving crowd at a rally for the Senate campaign of GOP Rep. Larry E. Craig, that is responsible for appropriating “every dollar and tells the President how to spend every single penny.” Now, Bush said, he has agreed to deal with this Congress and negotiate a budget “without preconditions.”

Bush continued: “You’ve seen the firestorm about revenues being on the table. Well, I’ve done my part--now it’s their turn.” If the partisan audience thought he had betrayed a partisan promise, it gave no indication. There were no hoots and whistles.

Then Bush’s voice hardened, and he called for budget process reform and spending control--familiar themes in political speeches but issues half-forgotten in the current budget go-around with congressional Democrats.

Staff writer Oswald Johnston in Boise, Ida., contributed to this story.