All signs are pointing to a formal announcement Friday that White House and congressional negotiators have agreed on a fiscal 1990 budget bearing a deficit of about $100 billion.
The deficit for the current fiscal year, which ends Sept. 30, is expected to surpass $170 billion.Bargainers resumed their private meetings in a Capitol office Thursday, with both sides hoping to give final shape to a deal on the $1.2 trillion spending plan.
The talks broke off early Wednesday evening because some of the participants had other appointments, but one source knowledgeable about the sessions said a final agreement could probably have been reached had the negotiations lasted another 30 minutes. Another source said that House leaders have been told to expect to travel to the White House on Friday for a public announcement of a pact.
"I'm very hopeful, actually optimistic that we will have an agreement this week," House Majority Leader Thomas Foley, D-Wash., said after Thursday's meeting.
Even though the current deficit will likely exceed $170 billion, optimistic economic assumptions used by the White House - and accepted by Congress - budget writers say they need to find only $28 billion in savings to chop next year's red ink to $100 billion. The Gramm-Rudman law would trigger automatic spending cuts if the deficit surpasses that amount by more than $10 billion.
Yet, some lawmakers are already acknowledging that the talks will not produce the profound budget reductions that some legislators, economists and others say are necessary to take a meaningful bite out of the government's fiscal problems.
"I don't think anybody's expectations ought to be driven to the point of expecting a dramatic and breathtaking announcement," said Foley.
The deal would achieve half of its savings by reducing anticipated spending, and half by raising revenues.
Tentative revenue agreements include nearly $6 billion by selling federal assets, $5.6 billion from new taxes and much of the rest from raising fees for various government services.
President Bush pledged during last fall's campaign not to raise taxes, and battles between him and the Democratic-controlled Congress can be expected over new taxes.
Bush has favored reducing the capital gains tax, which he says would stimulate the economy and raise revenues next year by $4.8 billion. Democrats say the proposal is a money-losing boon to the rich.
Accounting gimmicks are expected to provide much of the remaining savings.