Infighting Seen as Imperiling a Deficit Accord : Budget: Preelection attacks may be so bitter as to make it impossible to pass any deal. Dole suggests putting capital gains in a separate bill.

Even as negotiators continue to grope for a budget agreement, congressional Republicans and Democrats have escalated a political blame-game with an eye on the approaching November elections.

Although President Bush has been steering clear of partisan attacks, in large part to avoid alienating Democrats at a time of international crisis, members of Congress have shown no such compunction.

Senate Minority Leader Bob Dole (R-Kan.) attempted to break the deadlocked budget “summit” negotiations by suggesting that the proposal to cut capital gains taxes, favored by Bush, be dropped from any deficit-reduction package.

He said that the capital gains issue and some relatively non-controversial tax breaks for businesses and self-employed persons should be considered in separate legislation that would include revenue-raising measures to offset losses from the tax cuts. But the idea is not expected to be approved.

Meanwhile, Senate Majority Leader George J. Mitchell (D-Me.) said on a television call-in show that a capital gains tax cut should be enacted as part of a deficit package. He made it clear later, however, that it would have to be part of a “fair and progressive” combination of tax provisions. Similar calls to pair a capital gains tax cut with higher taxes for the wealthy already have failed to sway Republicans.

By and large, rather than cutting the deficit, members of both parties seem more interested in cutting up their adversaries. One result of the sharp infighting may be that neither the Senate nor the House will be prepared to approve a deal even if the negotiators are able to bridge the remaining wide gaps.

“Given the acrimony on both sides, an agreement is very, very hard to find,” said a Republican who has been following the talks.

Even before the break-off last Monday night of budget negotiations being held at Andrews Air Force Base, Democrats were pounding a populist theme. They alleged that Bush’s insistence on reduced capital gains taxes--which they contend would bring a windfall for the rich--is the last obstacle to an agreement.

Belatedly responding, Republicans argued that “recession Democrats” want to raise taxes so high that they would strangle an already shaky economy. Moreover, they defended their attempt to lower the tax on profits from the sale of stocks and other assets as the only job-creating proposal on the bargaining table. Steps would be taken to make sure wealthy taxpayers got no advantage from the package, GOP leaders declared.

Liberal Democrats demanded that their negotiators fashion a Democratic deficit-reduction plan and present it to Bush on a take-it-or-leave-it basis.

“We can’t cave in on our principles just to save their bacon,” said Rep. Vic Fazio (D-Sacramento), vice chairman of the Democratic Caucus, reflecting the angry mood of rank-and-file Democrats.

Conservative Republicans, unhappy even with GOP negotiators’ tentative approval of some excise taxes, responded with a call to “junk the summit” and simply slash Democrats’ favorite spending programs to reduce the deficit.

Participants in the budget talks gave widely varying and distinctly partisan appraisals of the outlook for an accord as the days dwindle down before automatic Gramm-Rudman spending cuts take effect on Oct. 1.

“Progress has been minuscule,” Rep. Bill Frenzel (R-Minn.) said as he pointed the finger at Democrats.

“We have narrowed the gap significantly in most areas,” Majority Leader Mitchell said in his appraisal of the same talks. “I think it can be promptly reconciled in all areas once we settle the tax issue.”

An examination of the last offers exchanged between negotiators at Andrews Air Force Base indicates that Frenzel’s pessimism is closer to reality than Mitchell’s optimism. The last-known Democratic proposal did not provide five-year spending reduction figures for defense or domestic programs, for example. And there was a vast $42-billion gap between the two sides’ energy tax proposals.

In addition, there was no meeting of the minds on how to reshape the Medicare program, a politically sensitive factor in the negotiations.

But it suited Democrats’ partisan interests to portray what they called a “soak-the-poor” capital gains tax cut as the sole sticking point in the 4-month-old bargaining. That’s how key Democrats, including Speaker Thomas S. Foley (D-Wash.) and his top lieutenants in the House, described the stalemate.

The Democratic Study Group, which includes most of the House Democrats, distributed poll results this week indicating strong public disapproval of a capital gains tax cut and broad support for the Democrats’ efforts to raise taxes on the wealthiest Americans.

“I’d love to take this issue to the country,” one Midwestern Democrat said, alluding to the coming congressional elections.

However, more cautious Democrats in the Senate said that they want no part of a Democratic deficit-cutting plan that would raise taxes and cut spending unless it has the support of President Bush and the Republicans, because any such plan will involve politically painful decisions.

But Republican summit participants claimed an advantage for the GOP proposal on grounds that a cut in capital gains taxes would spur investment, create jobs and help avoid a recession.

“If we argue jobs and lower taxes and Democrats argue class envy, we win,” one GOP strategist said, indicating his party’s theme in the blame-game.

However, a poll made public Thursday by the Wall Street Journal and NBC News indicated no political advantage for the White House or the Democratic-controlled Congress in the budget impasse.

When asked who would be mostly to blame if there were no agreement on deficit reduction, 34% said the Bush Administration, 31% said Democrats in Congress and 17% said both equally.