Officials Say Gulf Crisis Won’t Halt Budget Pact : Congress: White House negotiators and lawmakers huddle in seclusion at a military base. Political squabbles mark the start of the talks.

Budget talks between the White House and Congress resumed Friday with negotiators vowing that the rapidly escalating costs of the Persian Gulf military buildup will not prevent them from completing work on a $50-billion package of spending cuts and tax increases by Monday.

“We haven’t changed our focus or objectives,” President Bush declared as he arrived at Andrews Air Force Base for a 30-minute visit with lawmakers. “Nothing has transpired anywhere that makes me less interested in getting a budget agreement that gets this deficit under control once and for all.”

But the opening session, convened in the isolated and relatively Spartan atmosphere of a military base 10 miles from Capitol Hill in order to escape the scrutiny of reporters and lobbyists, was marked by the usual petty and not-so-petty squabbles among lawmakers.

Republicans, for example, complained that their private discussion area just outside the officers’ bar where the group is meeting is smaller than the section set aside for Democrats.

More seriously, both sides discreetly leaked attacks on each other’s plans, with Democrats criticizing Republicans for trying to dodge higher taxes on the rich while GOP lawmakers aimed barbs at Democrats for wanting to slash Pentagon spending in the face of the crisis in the Middle East.

“We’re not going to have the kind of defense meltdown that some had sought,” Sen. Phil Gramm (R-Tex.) told reporters. “There are still mean people in the world, and, even in an era when the lion and the lamb are about to lie down together, it’s important that the United States of America be the lion.”

Despite the predictable responses, Democrats and Republicans finally were talking to each other about substantive proposals after three months of meetings earlier this year and a five-week break for Congress’ summer recess.

But, with time running out to avoid more than $100 billion in automatic spending cuts scheduled for Oct. 1, it was still unclear whether negotiators could bridge the large gap that divides them. Bargainers are aiming to complete work by Monday to allow Congress time to write the plan into law.

With next year’s federal deficit now likely to reach $250 billion, negotiators hope to develop a deficit-reduction package this weekend that will persuade the Federal Reserve to lower interest rates and provide lawmakers with a legitimate excuse to throw out next year’s clearly unreachable deficit target of $64 billion. The target is mandated by the Gramm-Rudman deficit-reduction law.

Many lawmakers, however, consider the Administration’s threat to impose Gramm-Rudman cuts of almost 40% on a wide variety of defense and domestic programs a paper tiger because of the unacceptable damage it would inflict on the Pentagon during its buildup for possible war in the Persian Gulf.

In developing their budget package, negotiators hinted that they plan to ignore for now most of the added costs of the Middle East conflict, estimated to be running at $1.5 billion a month. At the same time, they welcomed the news that Saudi Arabia, the exiled government of Kuwait and a handful of other nations would contribute funds to help defray the costs of the U.S. forces.

The $53-billion Republican package, largely based on a White House plan that was disclosed several weeks ago, calls for higher taxes on wine and beer and substantial cuts in Medicare and other federal benefit programs.

The roughly $50-billion Democratic proposal, finally pulled together late Thursday night, aims to impose higher taxes on those earning more than $200,000 a year, calls for stiffer levies on smoking and liquor and hits defense spending much harder than domestic programs. It would raise taxes by almost $27 billion and slash defense spending by almost $15 billion, while limiting benefit cuts to about $6 billion.