House Democrats were badly split Tuesday over a deficit-reduction plan that would raise gasoline taxes, boost Medicare costs and limit deductions of higher-income Americans.
"We asked for a show of hands on support for the package and it was right down the middle - 50-50," Rep. Dan Rostenkowski, D-Ill., chairman of the Ways and Means Committee, told reporters after a caucus of House Democrats."That's not good, not good at all," Rostenkowski said.
Congressional leaders must win support of a sizable majority of House Democrats to pass a deficit plan, since most House Republicans say they will oppose any proposal that raises taxes. President Bush on Tuesday appealed to Republicans to put aside any self-interest and support the emerging deficit plan.
Rostenkowski said the biggest problem among Democrats was a plan pushed by the Bush administration and Senate Republicans, which would limit the itemized deductions of people with incomes over $100,000. House Democrats prefer to hit the rich by imposing a surtax on those with incomes over $1 million, or perhaps even lower.
Republicans reject that approach. The battle over the two options is the major obstacle preventing negotiators from agreeing on a plan to cut the deficit by $250 billion over the next five years.
After months of effort, lawmakers had appeared to be building toward agreement on a plan that would raise the gasoline tax, tax the wealthy and cut programs as diverse as Medicare and farm subsidies.
Asked if agreement were near, House Democratic Whip Bill Gray said, "Who knows, lightning might strike at any moment."
Bush's top aides were involved in the talks while the president campaigned in New England - both for GOP congressional candidates and for the deficit-cutting deal.
Bush called on House Republicans, many of whom opposed his budget stand, to put "self-interest" aside and stand with him in support of a plan. "We're hanging tough for a good agreement," Bush said.
At the Capitol, House Democratic leaders met with their rank and file to discuss the proposals to raise taxes on the richest Americans.
A dispute over how to raise taxes on Americans with incomes over $100,000 a year is blocking agreement on the $250 billion deficit-reduction plan.
After a full day of on-and-off talks, House Speaker Thomas S. Foley, D-Wash., said Monday night that bargainers were on the brink of agreement.
"Not yet," Senate Majority Leader George Mitchell, D-Maine, replied when asked whether a tentative agreement had been reached.
Time is short. The government will run out of money at midnight Wednesday and there are doubts President Bush will sign a third stopgap spending bill unless a deficit agreement is ready. In addition, Congress is eager to adjourn this week for the year.
By all accounts, the biggest obstacle to signing a pact was choosing between Democrats' insistence on a surtax on high-income taxpayers and a Republican proposal to limit their itemized deductions.