Subject: Movement toward compromise on the budget

There were indications today that the White House and congressional Republicans were making progress toward a compromise budget plan. Details appear to be shaping up as follows:

• About $100 billion in net tax cuts over five years. There was movement on both sides on this issue. Republicans had wanted much more. President Bill Clinton's original proposal had been in that range, but he was also effectively proposing tax increases by closing many corporate tax loopholes. Those will now likely be dropped.
• About $100 billion in Medicare cuts over five years. This too was a compromise on both sides.
• Still to be resolved: the White House says it may be amenable to a slight Consumer Price Index adjustment, which Republicans have called for. Some Republicans have indicated they might accept a compromise between Congressional Budget Office and OMB economic estimates. (The closer they move toward the more optimistic OMB estimates, the easier it will be to balance the budget.)

There are also no specifics yet on the tax cuts -- would they be for middle income families, education, capital gains taxes or estate taxes. Some sources say they may just agree to the figure, and hash out the particulars later.

The president is now trying now to assess where the congressional Democrats stand. Many are insisting that Clinton force Republicans to produce their own budget, for contrast purposes.

The Clinton Administration thinks that would only lock Republicans into immovable positions.

At this point in the budget talks, Republicans seem fairly happy with the progress. But the White House is concerned that they will be unable to win over the Dems.