BUDGET DEAL LOOKS LIKELY.

Byline: Alan Fram Associated Press 

Aides to President Clinton and congressional leaders worked into the night Thursday polishing final details of a pact to balance the budget by 2002 while trimming taxes by about $135 billion. With a conclusive handshake seemingly near, both the White House and Republican leaders on Capitol Hill made plans for announcing a deal today.

The GOP and White House negotiators were haggling over whether the current bargainers or GOP-dominated congressional committees later on would define the details of tax cuts, and Democratic complaints that their 10-year price tag would be too high.

``There's got to be confidence that all the hard work we've done on the deficit has not gone for naught because of uncontrolled tax cuts,'' said one White House official, speaking on condition of anonymity.

But a GOP negotiator, also on condition of anonymity, called the outstanding tax questions ``a minor detail'' that could be worked out in the morning.

The Capitol became a beehive of budget activity as administration officials raced back and forth trying to drum up Democratic support, and GOP leaders staged a parade of meetings aimed at nailing down Republican backing. Clinton spoke by telephone to Senate Majority Leader Trent Lott, R-Miss. - with House Speaker Newt Gingrich, R-Ga., in the room with Lott.

As expected, House Democrats were the unhappiest group on Capitol Hill. White House Chief of Staff Erskine Bowles and other administration officials met with them in a session that participants said was punctuated with groans and interruptions.

``The Medicare cuts are too deep, the tax cuts are too deep and the military budget is too high,'' Rep. Barney Frank, D-Mass., told reporters. ``Locking into a five-year deal with a right-wing majority in control is a mistake.''

But the deal was nearly done - so close that GOP leaders were tentatively planning to announce the agreement at 11 a.m. today (8 a.m. PDT) in the Capitol's Rotunda, a cavernous room beneath the dome. And one administration official, requesting anonymity, said he expected a deal to be announced before Clinton flies to Baltimore at noon for a meeting with Senate Democrats.

Publicly, both sides were optimistic but guarded. White House spokesman Mike McCurry said Clinton was ``encouraged'' by progress, but he cautioned that more work remains. Lott said a deal could occur shortly, but he added, ``We're still working out the numbers.''

According to participants on both sides, the emerging package contains:

$115 billion in five-year Medicare savings, including slight increases in monthly premiums for many recipients.

A children's tax credit, reductions in the capital-gains and estate levies, and tax breaks for college students Clinton sought.

A total of $70 billion more over the next five years for education and other domestic programs, $20 billion less than Clinton wanted.

An assumption that the government will pare its measure of inflation by about 0.3 percent, meaning slower growth of Social Security benefits and of deductions and exemptions for most taxpayers that would save the Treasury about $35 billion through 2002.

Attention was already turning to the arduous process of lining up support in Congress for the compromise, which if completed would mark a watershed in the deficit wars the two parties have waged since the beginning of the Reagan era.

The early conventional wisdom was that most Republicans and a minority of Democrats would vote for budget-balancing legislation that would be written to reflect the compromise. The most likely opponents: liberal Democrats upset that domestic spending was too low, and conservative Republicans angry that tax cuts were insufficient.

``This thing will be like a dead fish,'' said Sen. Phil Gramm, R-Texas. ``You set it on the table for three or four days and it will begin to stink.''

And former Republican vice presidential candidate Jack Kemp, an influential voice with conservatives, joined in a letter to Lott protesting the compromise.

``As we understand it, the budget deal taking shape contains little meaningful tax reduction despite repeated promises of relief to the American people,'' said the letter from the National Tax Limitation Committee.

An angry House Minority Leader Richard Gephardt, D-Mo., complained that congressional Democrats had had a scant role in the weeks of private bargaining that produced the outline. Gephardt, a potential presidential contender in 2000, has long been expected to oppose an agreement.

``What counts is votes,'' he warned, adding, ``It does not give me great optimism or confidence you'll get enough Democrats'' for a package.

After initially flashing anger over the secret talks and some of its spending cuts, Senate Minority Leader Tom Daschle, D-S.D., said after an administration briefing that the package appeared acceptable.

``The framework that was explained to us today is largely satisfactory,'' he told reporters.

The White House fired back in defense of the evolving deal.

``We can't govern in an environment in which the Democrats, who are a minority in the Congress, can get everything they want,'' McCurry said.