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With the deadline for the dreaded sequestration 20 days away, Darman's latest scheme proved too optimistic. When the negotiators finally sat down for 11 days at Andrews Air Force Base on Sept. 7, little was accomplished. Byrd, for example, demanded a $50 billion kitty for unspecified domestic spending. Several members -- Senators Robert Dole and Jim Sasser and Representative Silvio Conte -- often refused to work late. Air Force stewards larded buffet tables with so many roasts and desserts that, when asked what Andrews produced, one White House official replied, "expanded waistlines." When Bush gave his nationwide speech, the budget took a backseat to the gulf. Repeating his call for a cut in the capital-gains tax, the President promised not to tinker with tax rates. Bush made no concessions, but did call on Congress to sweeten the budget deal with $30 billion in tax breaks over five years.
At that, Democrats adopted a new tactic: outleak the White House. A Democratic study applauding the progressivity of the Democratic tax proposal (and pointing out the regressive quality of the White House proposal) found its way into mass circulation. "We're letting them frame the issues," said one White House official. "We're getting massacred."
Meanwhile, Darman tried a new tack. He revised his capital-gains proposal, suggesting that the rate be lowered from 19.6% to 15% in the hope of spurring a compromise with the Democrats at around 17% or 18%. The Democrats were willing, but only if Bush agreed to eliminate the "bubble," an irregularity in the income tax code that lowers the rate on earnings over $500,000 from 33% to 28%. In fear that Republicans would revolt again, Bush refused to budge on rates. At one point, Sununu discussed adjusting the tax brackets so that the lower rate would apply only to income above $500,000. This time it was Senate Democratic leader George Mitchell who said no. "That would only solve half the problem," he said. "We believe marginal rates are too low." Replied Sununu: "It's the American way."
Darman kept quiet. It was part of their routine.