Bush Reaffirms Insistence on Cut in Capital Gains Tax

President Bush, declaring that “we’re down to the wire,” Friday reaffirmed his strong desire for a capital gains tax cut in any budget package as he prodded White House and congressional negotiators to reach agreement before an Oct. 1 deadline.

“We are now nine days and counting,” Bush said of the date on which massive automatic spending cuts of $100 billion or more would take effect if “super-summit” talks fail to produce an agreement.

Democrats in Congress, however, plan to approve next week legislation that would continue government spending at current levels and delay any spending cuts until Oct. 20--the date that Congress is likely to adjourn. Bush could veto the bill to put more pressure on the negotiators to come up with a deal.

The President brushed aside a proposal by Senate Minority Leader Bob Dole (R-Kan.) to consider Bush’s controversial plan to reduce capital gains taxes in a separate legislative package, thus removing a major stumbling block to a budget agreement.

The President and his allies argue that cutting the tax on the profit from the sale of stocks, bonds and other assets would spur economic growth and create jobs, but Democrats oppose the proposal as a windfall for the rich that would reduce government revenues by $21 billion over the next five years.

Although Democratic leaders said that Dole’s idea is worth exploring, no one else showed much enthusiasm for the two-track approach that Dole described as a way to get the stalled talks moving toward a solution.

On Capitol Hill, House Majority Leader Richard A. Gephardt (D-Mo.) said after the negotiators’ meeting that progress was made, although fundamental differences remain.

“Our goal is to move this to a conclusion as quickly as we can,” Gephardt said without setting any deadline or target date for agreement. The negotiators have missed several self-imposed deadlines since they began discussions last May.

The three White House officials and the five top congressional leaders taking part in the talks decided to forgo a meeting today and scheduled their next bargaining session for Sunday evening in the Capitol.

A quip by Dole, however, may have provided a better clue to the negotiating climate than Gephardt’s generally upbeat remarks. When photographers were allowed into the meeting room briefly Friday, a reporter asked what the participants had had for lunch.

“We couldn’t decide,” the quick-witted Dole shot back.

In his remarks at a news conference before departing for a weekend at his Camp David, Md., retreat, Bush put new emphasis on finding ways to enforce an agreement that he hopes will be achieved.

“I cannot accept a temporary quick fix that sweeps this problem under the rug,” Bush said. “And I will not accept a deal that fails to address, in a foolproof way, the government’s deficit.

“We must have a five-year, $500-billion plan that keeps our country strong, competitive and puts us on the path to long-term economic growth,” Bush declared.