Budget Talks Stall Over Tax Cut Timing

Agreement on the federal budget resolution hit a snag Friday when key Democrats in the Senate balked at language they said undermined a deal on tax cuts they had reached with the White House this week.

Senate Democrats who represent potentially crucial swing votes said the language fails to commit to a $100-billion tax cut over the next two years, a provision they said was promised by the White House.

“There is great concern that this document does not meet the terms or conditions we agreed to,” said Bette Phelan, a spokeswoman for Sen. John B. Breaux (D-La.).

The impasse centers on a short-term tax cut Democrats have insisted upon as a prerequisite for their support of a much larger cut President Bush hopes to enact over the coming decade. The compromise reached this week outlined a $1.25-trillion tax cut over 10 years, plus $100 billion in cuts to be enacted this year and next. But the resolution drafted by GOP-led Senate and House conferees essentially lumps both tax cuts together in the 10-year package.

Bob Stevenson, spokesman for Sen. Pete V. Domenici (R-N.M.), chairman of the Senate Budget Committee, said the tax cuts were combined “to allow for maximum flexibility.”

There is nothing to prevent a short-term cut from being enacted, he said, pointing out that the resolution contains language stating it is the “sense of the Congress” that a short-term cut is necessary.

But Breaux and other centrists fear Republicans, many of whom have opposed the short-term stimulus plan, are simply reneging on a deal.

The disagreement casts new doubt on whether the resolution will be passed in the House and Senate early next week, as was scheduled. With the Senate evenly split along party lines, and at least two Republicans wavering in their support of the budget, it may need a number of Democratic votes to pass.

Snags are fairly common in the latter days of budget negotiations, but the hiccups this week have been unusual. The House, for example, was expected to vote on the resolution about 2 a.m. Friday but delayed the vote until next week after it was discovered that two pages of the document were missing.

Breaux and others are expected to meet with House and Senate budget negotiators Monday.