NATIONAL
Bush may compromise on capital gains tax
WASHINGTON (AH) - President
Bush may be witling to drop his insis
tence for a cut in the capital gains tax.
Republican congressmen said Wednes
day. a demand that has been the major
obstacle to a budget deal.
But the apparent softening of Bush's
position was revealed on a day when
Bush and congressional Democrats had
their most withering public flare-up
over the talks in weeks.
The two sides accused each other of
endangering their stalled bargaining,
just five days before disruptive cuts in
government services will be imposed if
the negotiations fail.
The White House signaled a willing
ness to consider keeping the current
capital gains tax rate — the same as or
dinary income — but exempting gains
due to inflation. Democrats brushed
aside the idea.
Bush said nothing about his reported
change in his capital gains stance as he
campaigned for Republican candidates
in Ohio.
"The hang up is with the Demo
crats." he said, accusing them of refut
ing to do their part to cut the deficit.
"If and when the ax falls, the Demo
cratic Congress knows that it will be
held accountable." he said. "And I will
take that message to every state in the
union. It is their fault "
He also told reporters while flying to
Ohio that Democrats "have not come
forward with a package" at the talks, a
remark that touched off a Democratic
uproar
Senate Majority Leader George Mitch
ell. D-Maine. and House Speaker Thom
as S. Foley. D-Wash.. said Democrats
have made several offers in recent bar
gaining sessions.
"To begin a series of charges or coun
tercharges ... at this stage is not help
ful." Foley said. "It is damaging to the
talks, though we're determined it not be
critically damaging "
Mitchell said the president must have
been ■badly misinformed” to have
made the comment, and called it "high
ly misleading and damaging.”
The Foley-Mitchell complaints led
Bush to apologize at a later speech in
Chicago. "Earlier today. I said the Dem
ocrats have not come forward with a
package. They say they have put a pack
age. or at least a series of proposals, on
the table in private negotiations. I ac
cept the fact that in private negotiations
there have been such proposals. I apol
ogize for misspeaking on that point."
However, he said. "We have yet to
see a comprehensive plan” that encom
passes the goals of serious spending
cuts, budget process change and incen
tives for economic growth.
Hundreds of unionized federal work
ers rallied outside the Capitol at noon to
demand a quick solution to the budget
crisis. They carried signs reading.
"Your furlough begins Nov. 6. Election
Day." and "Congress, you do your jobs
so we can do ours."
The rally was organized by the Ameri
can Federation of Government Employ
ees. which represents 700.000 federal
workers.
Inside the building, the Senate voted
overwhelmingly to apply the spending
cuts to the salaries of members of Con
gress and top executive branch officials,
including Vice President Quayle and
members of the Cabinet —items now ex
empt under the Gramm-Rudman budg
et-cutting law.
After a morning meeting at the White
House. GOP lawmakers said Bush was
signaling compromise. Instead of low
ered capital gains tax rates. Bush might
accept other items he believes would
spur the economy, they said.
Rep. Newt Gingrich of Georgia, the
No. 2 House Republican, said the alter
natives could include corporate tax
breaks designed to encourage research
and to prod businesses to operate in ail
ing urban and rural areas.
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without parental supervision
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