The budget will be sent formally to Capitol Hill Feb. 6. Despite the encouraging signs, the two sides do not agree on the details or the size of a tax cut.
Capital gains relief for homeowners also is to be part of the proposal.
President Clinton last week criticized GOP capital gains proposals with retroactive effective dates, stating the purpose of a capital gains tax cut is to provide an incentive prospectively. A retroactive cut gives a windfall to those who already have acted. Clinton also will attempt to address cash-flow problems that may arise upon the death of a farmer or small business owner. It also would eliminate the distinction for different forms of firm ownership contained in current estate tax rules. Other new items would provide tax relief to the District of Columbia and allow foreign sales corporation benefits for computer software licenses.