The Gulf: Bush's Other Summit

Like Mikhail Gorbachev, George Bush may have welcomed their rendezvous last weekend as a respite from problems at home. Just before the President departed for Helsinki, he ascended another summit, this one devoted to hammering out a plan to contain the exploding federal deficit.

The urgency of the task facing the congressional and White House budget negotiators, whom Bush left closeted at Andrews Air Force Base in Maryland, was alarmingly clear. Because of declining revenues from the weak economy, estimates of next year's budget gap are leaping into the stratosphere. Budget Director Richard Darman projects a shortfall for fiscal year 1991 of $250 billion, and some economists predict that if rising oil prices tip the U.S. into a deep recession, the figure could climb to $400 billion. If no agreement on the budget can be reached by Oct. 1, draconian spending cuts mandated by the Gramm-Rudman-Hollings law will go into effect, crippling every government agency from the Agriculture Department to the Pentagon.

That is a prospect so dire that neither side will allow it to occur. For the first time since the talks began four months ago, Democrats and Republicans both seemed more interested in working out a deal than in political posturing. Bush believes the crisis atmosphere arising from the showdown with Saddam Hussein may be the best, and last, chance to stampede the Congress toward a budget agreement.

Both sides remain publicly committed to their agreed-upon goal of cutting $50 billion out of the deficit next year as a down payment on $500 billion in reductions by 1996. But despite the burst of bipartisan determination, Bush is unlikely to be presented with an accord when he returns to Washington. As the talks began, Democrats suggested instituting a vaguely defined tax on energy and eliminating the income tax provision that reduces the marginal tax rate for the wealthiest Americans from 33% to 28%. Both ideas are anathema to Republicans, some of whom, like House minority whip Newt Gingrich, are calling for tax cuts to blunt the edge of a recession. G.O.P. leaders responded with a call for a cut in capital gains taxes, which Democrats adamantly oppose, along with higher levies on tobacco and alcoholic beverages and a $10,000 limit on individual deductions for state and local taxes.

By entering the talks himself, Bush hoped to pressure both sides to forge an agreement in time to announce it in a nationally televised address on Tuesday night. Failing that, he may use the speech either to blast those he blames for the impasse or to make a dramatic offer to break the deadlock. Not even his closest advisers could say which option Bush would take.