Budget Deal Likely, but Not Until the Fall, Analysts Say

A DEAL that takes control of the national budget deficit will apparently have to wait until fall. The delay pushes the negotiations into the more combative and difficult atmosphere of fall elections. It also leaves a sputtering and uneven national economy awaiting reassurance on next year's budget.

The hangups:

Many Democrats still lack trust in the White House negotiators and are willing to keep watching the president weather political storms over his budget positions.

Many Democrats are unwilling to risk fracturing their own constituencies over painful budget proposals when Republican schisms may sink the deal anyway.

But there is an optimistic note: Most analysts and activists foresee a budget deal that seriously cuts the budget deficit emerging eventually - whether before November elections or after.

What last week looked like the brink of serious negotiating has stalled out. Only the official White House spokesmen now hold out any hope of an agreement before Congress breaks for recess on Friday - not to return until September.

While the White House has drafted a budget package complete with new taxes and cuts in defense and social services, Democratic leaders show no intention of bringing a counterproposal to the budget summit table before leaving town. Republican leaders have discussed with the White House the possibility of keeping Congress in town in August to force a deal, but this looks unlikely.

Once Congress returns to Washington in the fall, it has only 25 working days to negotiate a budget that sharply reduces the federal deficit. Otherwise, the Gramm-Rudman law will begin automatically mowing federal spending across-the-board by $100 billion.

A consensus of economists has warned the budget summit negotiators that a $100 billion sequester, as the automatic cuts are called, could tip the economy into recession.

A budget deal along the lines taking shape in the summit, however, would be likely to lower interest rates and boost confidence in the financial markets.

Politicians want to avoid the risk of sequester or recession, both for the national welfare and the ominous political repercussions.

``No one can safely predict how the blame for [a sequester] would fall out,'' says Bob Greenstein, director of the Center for Budget Priorities.

The White House has made a high investment in getting a budget deal, especially the president's jettisoning of his no-new-taxes pledge. But the stakes are high for Democrats as well.

``When Americans are asked who's more responsible for the deficit,'' says William Galston, a University of Maryland professor and former Mondale campaign issues director, ``lots more people say Congress than Bush.''

Just like the White House, says Stuart Eizenstat, a Washington lawyer and domestic policy chief in the Carter White House, ``the Democrats on the Hill don't want to cause a recession. They don't want to be perceived as causing it.''

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