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On The Verge Of A Budget Deal?

Negotiators make progress but two key sticking points remain

WASHINGTON (AllPolitics, July 28) -- A deal to balance the budget and cut taxes is imminent, Republican leaders and the White House say, as negotiators move toward resolving two key disputes over the child tax credit and children' health insurance coverage.

President Bill Clinton today said that the two sides are on the verge of a deal that could be "the achievement of a generation."

"This is an historic opportunity. It can be the achievement of a generation. It can only happen with big majorities of people in both houses in both parties coming together and I believe we're on the verge of achieving it," Clinton predicted.

Talks have been underway all day. Work on the budget continued through the past weekend, as negotiators met Saturday while aides spent Sunday drafting the agreement outline into legislative language.

The feverish push is driven by hopes to pass the bills by Friday before Congress leaves for its August recess. A deal is expected to be reached Tuesday morning, though could come as early as tonight.

Senate Majority Leader Trent Lott sounded optimistic. "I'd have to say I think we are very close ... I hope that we will continue to try to come to a conclusion today if at all possible," Lott said.

House Speaker Newt Gingrich warned that there could still be glitches as negotiators try to put their work into written form. "I think we have an agreement but it's not an agreement until its written down," Gingrich said.

So close, but so far

As close as they are, both sides do agree on what they haven't agreed to yet. There is still no firm agreement on eligibility requirements for a new $500-a-child tax credit. The GOP has apparently accepted a new administration proposal that would make the tax credit available to some lower-income workers who also get the Earned Income Tax Credit.

In exchange, Republicans succeeded in making the credit available to more families at upper-income levels.

Another point of contention is spending for health benefits for poor children. Still at issue are questions of how much money will be allocated and whether the federal government or the states will run the program.

Still, negotiations have undeniably progressed. The capital gains tax reduction, so beloved by Republicans, seems to be almost a done deal. It will be reduced to 20 percent down from 28 percent. But the tentative accord does not index these taxes to inflation, which had been a key Republican demand.

Republicans will also get estate tax adjustments they covet. And there will be a cigarette tax increase, estimated at 15 cents-a-pack, to help finance children's health care.

CNN's John King and Bob Franken contributed to this report.