Democrats pushed President Bush to accept higher taxes on the richest Americans Friday as Congress began a final drive to craft a compromise deficit-reduction bill.
Republicans warned that pressing Bush too hard would merely invite a veto.Bush, meanwhile, signed a stopgap spending bill to keep the government functioning through next Wednesday to give Congress more time to work on a final budget compromise.
He signed the legislation shortly before leaving the White House for a weekend at the presidential retreat in Camp David, Md.
GOP lawmakers mustered around a bipartisan budget the Senate adopted early Friday imposing only modest tax increases on the wealthy and doubling the gasoline levy. Democrats preferred a House-passed version leaning heavily on the rich, leaving the gasoline tax alone and easing cost increases on Medicare recipients.
"We believe in tax fairness and progressivity, and that's what we're going to fight for," said House Majority Leader Richard Gephardt, D-Mo.
"You can bet your life if a package is going to pass in this House it's going to include the rich," said Rep. Charles Rangel, D-N.Y., of the tax-writing Ways and Means Committee.
But as House and Senate budget-writers began bargaining over a $250 billion, five-year package of taxes and spending cuts, Republicans warned that Democrats could not go too far without risking a veto by Bush.
"I don't know why we have to go through a process of producing a bill that will not be signed," said Sen. Pete Domenici of New Mexico, ranking Republican on the Budget Committee.
Bush reiterated his preference for the Senate version and said, "I, for the first time, feel optimistic that we can get this job done for the American people."
The president visited the Capitol for about an hour, urging lawmakers to quickly fashion a compromise plan.
"He said nobody is going to get all he wants," Senate Minority Leader Bob Dole, R-Kan., said afterward.
But with Election Day barely two weeks off, senators who hours earlier were united behind their compromise budget exhibited the same partisan strains that have divided House Democrats and Republicans for weeks.
Senate Budget Committee Chairman James Sasser, D-Tenn., said he did not feel obliged to fight for his chamber's deficit-cutting package. "I much prefer the House package with regard to revenues. It puts a heavier burden on the wealthiest Americans to pay their fair share."
Responded Domenici: "I don't think any good purpose is served by Chairman Sasser choosing sides. Frankly, the House bill isn't that great."
Although the pressure of another threatened governmental closure was lifted, budget writers planned to work through the weekend in hopes of allowing Congress to adjourn for the year by midweek.
Lawmakers and staffs met throughout the Capitol, tackling a task whose complexity was symbolized by the legislation itself: a stack of paper weighing 13 pounds.
The legislation is the major part of a plan to cut the deficit by $500 billion over the next five years, including $40 billion this year. The rest of the savings would come from cuts in the defense budget and savings on interest payments on the debt.
House Speaker Thomas Foley said Democrats would insist that the Senate moderate its doubling of the 9-cent-per-gallon gasoline tax and its steeper increases in out-of-pocket Medicare costs for beneficiaries.
He also noted that Democrats remain behind the House plan's higher taxes on the rich. That package increases the income-tax rate the richest people pay from its current 28 percent to 33 percent and puts a 10 percent surtax on people earning $1 million annually.
"Obviously, compromises are required," Foley, D-Wash., told reporters after a party caucus. "The insistence of the president in having no income tax changes (affecting the rich) seems to be inexplicable and inflexible."
Lawmakers have talked for days about a possible compromise boosting the top tax rate to 31 percent.
Bush has said he would accept that increase only in return for deep cuts in the capital gains tax, a trade Democrats are unwilling to make. But Republicans would not flatly rule out higher tax rates on the rich.
"I can't support an increase in the tax rates," said Sen. Bob Packwood, R-Ore., ranking Republican on the Senate Finance Committee. But he added, "I may get rolled" during House-Senate negotiations.
Bush strongly opposes a House provision that would, in effect, cause slight income-tax increases on most Americans. It would delay for one year the inflation adjustment made in tax brackets and the personal exemption. Democrats have said that provision is likely to be altered or eliminated.
Both the House and Senate bills would increase taxes on tobacco, alcohol, airline tickets and luxury items such as private planes. Both would enlarge tax credits for low-income people.
Bringing the 2 packages together
House and Senate negotiators are trying to reach a compromise on the two different budget packages.
A plan passed early Friday by the Senate would raise gasoline taxes 9.5 cents a gallon, hike cigarette and alcohol taxes and increase costs to Medicare beneficiaries.
A plan passed Tuesday by the House would raise income tax rates on the wealthiest Americans from 28 percent to 33 percent, impose a 10 percent surtax on those with taxable incomes of more than $1 million a year and eliminate any gasoline tax hike.