White House officials say President Bill Clinton is now prepared in the short term to forego his proposed $100 billion in tax cuts if that's what it takes to achieve a balanced budget agreement with the Republicans this year.

Last week, House Speaker Newt Gingrich (R-Ga.) surprisingly floated that proposal but he was immediately challenged by several of his Republican colleagues, including House Majority Leader Dick Armey (R-Texas) and Senate Majority Leader Trent Lott (R-Miss.). They maintain they had no intention of dropping their proposed tax cuts, variously estimated at around $200 billion over five years. By week's end, Gingrich was seen as modifying his proposal -- saying he expected to see tax cuts by the end of the year.

Administration officials insist Clinton strongly supports his tax cut proposals, including a $500-per-child tax credit, several widely publicized education tax credits and deductions, and the elimination of capital gains on most home sales. But they say that if the only way to achieve a balanced budget this year is to postpone those tax cuts, he would do so.

"We are trying to make it clear that we are not standing in the way of a balanced budget," says one administration official. Just before leaving for Helsinki, Finland, last Wednesday, the president met with the House and Senate budget committee chairmen and ranking Democrats and emerged saying that balancing the budget would be his top priority upon his return to Washington.

This week, administration and congressional staffers are meeting informally. Next week, talks are expected to resume involving senior White House officials and the budget committee chairmen and ranking Democrats. That is expected to be followed by a White House invitation to the bipartisan congressional leadership to meet with the president to see if a deal is possible.