Agreement Near On Budget But Two Sides Have Differing Ideas On Seriousness Of Remaining Issues

Clinton administration officials and congressional leaders moved to the verge Sunday of a long-sought compromise on cutting taxes and balancing the budget by 2002. But the two sides offered varying descriptions of how serious their few remaining differences are.

“I think we have an agreement,” House Speaker Newt Gingrich, R-Ga., told reporters amid closed-door budget meetings in the Capitol. “It’s never done until it’s done. We’re down to maybe three tiny issues. They’re all manageable.”

But White House economic adviser Gene Sperling said disagreements remained over precisely who would receive some of the tax cuts and details of an effort to expand health-insurance coverage for low-income children.

“There are significant issues … that are still unresolved and critical to a sound balanced-budget agreement,” Sperling said in an interview.

Speaking on condition of anonymity, Republican aides acknowledged that disputes remained over whether states or the federal government should decide the specific benefits children would receive. There was also disagreement over whether welfare beneficiaries who take public or nonprofit jobs should be covered by worker-protection laws and be required to be paid at least the minimum wage, which Republicans said could make it harder to find the jobs.

One thing on which both sides agreed: The proposal to boost Medicare premiums for higher-income recipients finally seemed dead. The Senate had approved the measure last month and President Clinton said he favored the idea, but House Republicans worried about retaliation by elderly voters insisted that be excluded from the final package.

Several mid-level White House aides met in the Capitol Sunday with congressional staff. Top ranking administration officials did not come to the Capitol but kept track of discussions over the telephone. Additional meetings were expected Monday.

Across the Capitol, aides were already drafting parts of the agreement into legislative language.

One of the issues of contention and among the thorniest to resolve was who would qualify for the proposed $500-per-child tax credit. Participants said Sunday they were near resolving that problem.

The emerging solution was aimed at satisfying Clinton’s demand that the credit help lower-paid families who owe little or no income tax, and still meet Republicans’ insistence that it apply to families earning more than $60,000, where Clinton has proposed beginning to phase it out.

Sperling said Clinton was now willing to extend the credit to better-off families, perhaps those in the $80,000 to $100,000 range, as long as it also applied to “the most hard-pressed working families.”

That possible compromise was just one detail of the still-evolving package discussed by eight congressional leaders and White House officials who blitzed the Sunday television news shows.

Participants pointed toward a likely cigarette tax increase, a victory for Clinton and many senators of both parties. And while Republicans will win a cut in the capital gains tax rate, a GOP Senate leader said a House-approved plan to exempt property values due to inflation from that levy has been jettisoned.

Senate Majority Whip Don Nickles, R-Okla., said the provision - which had attracted an explicit veto threat - would not be in the bill.

Appearing on ABC’s “This Week,” House Majority Leader Dick Armey, R-Texas, said the two sides were nearing agreement on the children’s tax credit and “trying to fit the president’s details into our principles and it’s a very difficult fit to be made but I think we can get there.”

And Senate Majority Leader Trent Lott, R-Miss., said on NBC’s “Meet the Press” that Republicans were for the first time considering applying the credit to people who only owe the payroll tax.

Exactly who should receive the child tax credit has been one of the fiercest disputes in the longrunning negotiations. Clinton has cast Republicans as favoring the rich over low-income people, and the GOP has accused the president of thirsting to expand welfare.

Republicans want a speedy deal on the budget so they can get bills cutting taxes and extracting savings from Medicare, Medicaid and other programs to Clinton by Friday, the scheduled start of Congress’ August break.

“I wish the president would come on back to town from wherever he is and help us,” complained Lott. “We need the chief to engage.”

Clinton, amid a Western trip, was staying at the Santa Monica, Calif., beachfront home of supermarket chain millionaire Ron Burkle and was playing golf Sunday. But top aides in the middle of budget negotiations said the president was completely involved.