Bush: Quick deficit action crucial > Discussions with congressmen begin

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WASHINGTON — President Bush opened the domestic budget summit Tuesday by calling the U.S. economy “not as strong or secure as it should be” and urging fast action to trim a widening federal budget deficit.

At the same time, Bush assured the team of 21 congressional negotiators there was no immediate crisis, participants said.

Lawmakers who attended the one-hour, 40-minute session at the White House said the president did not bring up the possibility of tax increases to cut the deficit nor make any other specific recommendations.

But he promised to share the responsibility with Congress for difficult and unpopular measures to try to slash $50 billion or more from the deficit, the participants said.

“It was pretty clear that we’re going to share the heat,” said House Budget Committee Chairman Leon Panetta, D-Calif.

Democrats, who approached Tuesday’s budget talks with some skepticism, said afterward they were willing to join the Republican administration in a full-scale assault on the nation’s deficit problems.

“We’re going into these talks in good faith and with an effort to find a constructive solution,” said House Speaker Thomas S. Foley, D-Wash. “We’re not going in with any other purpose.”

But Senate Majority Leader George Mitchell, D-Maine, said he could not say whether Bush’s words to negotiators would diminish Democratic suspicion that the administration might be setting a trap to blame Democrats for tax increases.

“We are going forward … because we believe this is a serious problem confronting the nation that we must deal with in a responsible nature,” Mitchell said, speaking to reporters outside the White House.

Deficit cuts of the magnitude being discussed by the president likely would require a mix of deep spending cuts and tax increases. But in recent days each side has suggested the other would have to be the first to propose any tax increase.

Senate Budget Committee Chairman James Sasser, D-Tenn., said that Budget Director Richard Darman told the congressional negotiators that the deficit for the fiscal year beginning Oct. 1 would be $140 billion to $188 billion if the costs of bailing out the savings and loan industry are counted.

If those expenses are not included, Darman said the deficit would be about $138 billion range, said Sasser — still far above the $64 billion target set by the Gramm-Rudman budget balancing law.

The figures were higher than the deficit estimates Darman provided GOP lawmakers with last week. Sasser said Darman did not provide an explanation as to why the numbers had increased.

“The administration has given us no indication of what the components of the solution to the problem should be,” Sasser said.

Bush declined to answer questions at a picture-taking session as he and other top administration officials met with the congressional leaders in the Cabinet Room. Pastries and coffee, not taxes, were on the bargaining table.

But White House spokesman Marlin Fitzwater afterward quoted Bush as telling the negotiators that, while there was no “immediate crisis,” fast action was crucial.

“We are fortunate that the economy continues to grow, but it is important to act while the economy is still growing, for growth is not as strong or secure as it should be,” Bush was quoted by his spokesman as saying.

“The American people are tired of seeing the budget process seem to fail year after year. They would welcome our doing the job right and fixing the process at the same time,” Bush added.

Fitzwater said Bush and the negotiators “agreed it was important to reach an agreement as soon as possible.”

Bush cited rising interest rates, lower-than-expected receipts and the rising cost of the savings and loan bailout as reasons for extraordinary action.

House Majority Leader Richard Gephardt, D-Mo., who will chair the meetings when Bush is not present, said there was “really no discussion of substance” about taxes by Bush at the opening session.

Gephardt said he was giving Bush the benefit of the doubt in terms of his motives. “If we try to politicize it (the summit) by carrying on the discussion in public, we’re going to destroy the effort,” Gephardt said.

Bush brought with him to the opening session Vice President Dan Quayle, Treasury Secretary Nicholas Brady, Darman and Chief of Staff John Sununu.

Senate Minority Leader Bob Dole, R-Kan., asked if the negotiators had moved closer or further from a tax hike, said: “We’re not closer or any further to anything. There’s nothing on the table.”

Dole added that coming up with a compromise that everyone could support “is not impossible, but it almost is. We’re going to have to make everything work to get a majority of Republicans and a majority of Democrats on board.”

Darman, who met with House Republicans earlier in the day, said, “It’s going to ultimately be the Congress that’s going to have to vote.”

Although Tuesday’s session was at the White House, most of the later deliberations are expected to take place on Capitol Hill.

The talks are designed to avert deep automatic spending cuts that will take place this fall in the absence of action on the deficit.

The across-the-board cuts would be triggered if the federal deficit is higher than the $64 billion target set by law.

The administration had estimated before Tuesday that the government will miss the targets by $45 billion to $55 billion — and by as much as $100 billion if the true cost of the savings and loan bailout is added to the budget calculations.