Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, July 19, 1990                   TAG: 9007190593
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A/3   EDITION: EVENING 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

BUDGET TALKS STILL ON DESPITE REVOLT BY REPUBLICANS

Bush and leaders of the House and Senate met privately Wednesday for 90 minutes at the White House. Both sides said they had made no significant progress in their hunt for $50 billion worth of spending cuts and tax increases for next year.

But they said they would meet again Monday and that other meetings between White House staff and lawmakers would be held over the next few days.

"A lot of work still to be done," Bush told reporters afterward.

Earlier Wednesday, rebellious House Republicans voted informally to oppose any new taxes as part of a deficit-reduction package. Participants in the closed-door meeting said the non-binding resolution passed by a 2-1 margin.

This put them in awkward counterpoint to Bush, who last month abandoned his 1988 campaign pledge to reject increased levies. But GOP lawmakers insisted their beef was with Democrats, who they accused of repeatedly opposing efforts to hold down federal spending.

"Today we sent a message to congressional Democrats that if they want to raise taxes, they can do it without us," said Rep. Richard Armey, R-Texas, who sponsored the resolution.

House Speaker Thomas Foley, D-Wash., said lawmakers and Bush had agreed that the Republican vote would not halt the budget summit, which has been under way for more than two months.

"Our decision is to go forward and attempt to reach an agreement," Foley told reporters. "We will not be derailed in our effort to reach an agreement."

The Democrats reiterated their demand that any budget package written by negotiators must be approved by a majority of both parties in the House and Senate.

The GOP resolution singled out Senate Majority Leader George Mitchell, D-Maine, for special vilification.

"Mitchell has abandoned the summit goals and emerged as a consistent roadblock to real spending cuts or growth incentives, and has championed tax increases at every turn," the document said.

Congressional officials, speaking on condition they not be identified, said Armey inserted the clause after reading his original draft - which did not mention Mitchell - to White House chief of staff John Sununu.

Sununu said the resolution should attack Mitchell, the sources said. Last week, the majority leader said he would reject a cut in the capital gains tax unless income tax rates on the wealthy are increased. Bush is a staunch advocate of reducing the levy on capital gains - profits from the sale of investments.

Attending the White House meeting were Bush, Foley, Sununu, House Majority Leader Richard Gephardt, D-Mo.; Senate Minority Leader Bob Dole, R-Kan.; House Minority Leader Robert Michel, R-Ill.; White House budget director Richard Darman; and Treasury Secretary Nicholas Brady.

On Monday, the White House estimated that the budget gap in fiscal 1991 - which starts Oct. 1 - will reach $168.8 billion, and tens of billions more if the counts of the savings and loan rescue are counted.

The Gramm-Rudman law sets a shortfall target for next year of $64 billion. The law will trigger automatic spending cuts of more than $100 billion unless a budget pact is reached.

Lawmakers from the two parties have been meeting separately since last week, trying to put together packages of spending cuts and tax increases that could be advanced at the talks as offers.