JOHNSON CITY, TN: Calling President Clinton a "do-nothing liberal president who is not interested in passing the reforms the country wants," Newt Gingrich said Friday that Republicans have given up on negotiating a budget compromise with the White House. Next month the GOP will unleash a television ad campaign blaming Clinton for the breakdown. "We've now shifted gears," Gingrich said, in one of the more dramatic understatements of the week. At the White House, President Clinton maintained an upbeat tone, offering a new plan to eliminate the home sales tax and lower the top capital gains rate from 28 percent to 20 percent. That's "a reflection of how serious the President is" about reaching an agreement, White House spokesman Mike McCurry told reporters. But it's more like a political endgame to the budget fiasco, notes TIME's Michael Duffy. "The Republicans knew last week it was all over. The White House may not have realized it until a few days ago, but they do now. So Clinton is now trying to appear flexible." Other Republicans echoed Gingrich's sentiments. "We're not going to have a deal," Senate Budget leader Pete Domenici said late Thursday. Said Bob Dole: "The President has already decided the talks are ended, and he's started to lay the groundwork . . . for his re-election bid."