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Budget Negotiators Reportedly Near Deal

Lott

Lott To Clinton: Take More Hands-On Approach

WASHINGTON (AllPolitics, July 27) -- Republican leaders and White House negotiators resumed budget negotiations Sunday night, amid reports that they are inching closer to a deal that would balance the federal budget and provide a tax cut.

President Bill Clinton spent Sunday on a swing to the West Coast, playing golf and attending fund-raisers in California -- all part of a calculated administration strategy to look relaxed and push Republicans to make concessions first. He will go to Las Vegas Monday to address a meeting of the nation's governors.

Though White House officials insist Clinton is "fully engaged" in the negotiations, a key GOP leader Sunday called on Clinton to take a more hands-on role in the process of reaching a budget deal.

"It's time for the president to make some concessions and make some agreements with us that will allow to close this," said Senate Majority Leader Trent Lott (R-Miss.). "We are so close, and yet we could be so far apart."

White House sources told CNN that Clinton is ready to answer Lott's call and take a personal role in the talks if necessary. The White House wants to reach a budget deal early this week.

"We've come to this historical opportunity and this historical time to get a balanced budget and a targeted tax cut," said senior Clinton adviser Rahm Emanuel on "Fox News Sunday."

CNN has learned that the White House is offering a new proposal on how to structure a proposed $500-per-child tax credit for low-income workers who already don't pay federal income tax, though details have not yet emerged.

Clinton wants to give these low-income taxpayers the full amount of the credit, which would offset the amount of Social Security and Medicare taxes they pay. The Republicans object to the idea of giving a tax credit to people who don't owe federal income tax.

The White House also wants to phase out the credit for families earning more than $60,000 a year, while the GOP would set that threshold at $75,000.

For their part, Republicans may be about to accept a cigarette tax hike to fund children's health programs, an item which the White House and congressional Democrats have been pushing.

"It's pretty obvious that when we're finished, there'll be some kind of cigarette tax in the package," said Senate Budget Committee Chairman Pete Domenici (R-N.M.).

Differences also remain concerning Medicare spending and a Republican proposal to index capital gains taxes for inflation. The White House has said indexing capital gains would be vetoed.

House Majority Leader Dick Armey (R-Texas), said Sunday on ABC's "This Week" that the GOP may be willing to give up the capital gains indexing in order to reach an overall agreement.

"We understand that, in order to get some of the other things ... that may not be something that will hold up," he said.

Armey said the two sides were "trying to fit the president's details into our principles, and it's a very difficult fit to be made. But I think we can get there."

Congressional Republican leaders have said they want to reach a budget deal before the House and Senate recess for summer vacation on Aug. 1.

Clinton is scheduled to vacation in August in Martha's Vineyard, Massachusetts. The White House has said he will delay his vacation if necessary to finish the deal.

CNN White House Correspondent John King contributed to this report.





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