Top congressional and White House budget negotiators reported some progress early Tuesday toward an agreement on a five-year, $500 billion deficit-reduction package.

"We're making progress on savings . . . cutting spending, but we're not quite there yet," White House Chief of Staff John Sununu said as he and other Republican negotiators left the Capitol about 12:30 a.m. EDT after nearly four hours of talks with Democrats.Senate Republican leader Bob Dole of Kansas said the group had made "some" progress but he declined to elaborate.

There was no indication from negotiators as the meeting broke up that any significant progress had been made on what Democrats have said is the biggest obstacle blocking an agreement - President Bush's insistence on cutting the capital gains tax.

Negotiators planned to resume talks Tuesday afternoon.

Negotiators are working under a rapidly approaching Oct. 1 deadline to avoid imposition of $105.7 billion in automatic, across-the-board spending cuts required under the Gramm-Rudman balanced budget law.

The cuts are expected to cause massive furloughs of federal workers and huge cutbacks in services ranging from air traffic control to food inspections.