WASHINGTON -- Top budget officials in Congress and in the Bush administration appear to be getting closer on aggreing to rewrite the 1990 budget agreement to get additional cuts in defense and the deficit, as well as channeling more money into domestic programs.

House Budget Committee Chairman Leon Panetta, D-Calif., yesterday said he favors an attempt to go well beyond the agreement in budget negotiations next year to reduce the deficit by between $800 billion and $1 trillion over the next decade.

"Budget deficits and debt continue to grow at record levels," despite the $490 billion of savings in last year's agreement, he said. The Congressional Budget Office is projecting the deficit will hover between $100 billion and $300 billion and produce a cumulative national debt of over $5 trillion -- over 50% of the gross national product -- by the end of the century, he noted.

Next year, interest payments on the national debt will exceed the entire discretionary budget of the U.S. government for the first time, he said. While everyone recently has been basking in the disintegration of Soviet communism, this accumulation of debt puts "our own system in grave danger of collapsing," he warned.

"The world is not standing still," he said. "The changes in the agreement were significant at the time," but the escalation of the deficit and changes wrought by the recession and the fall of communism have already rendered it outmoded, he said.

Rep. Panetta's announcement follows a weekend television appearance by Richard Darman, director of the Office of Management and Budget, in which he softened his opposition to holding budget negotiations next year and outlined three conditions under which the administration would consider doing so.

Rep. Panetta said he and Mr. Darman agree on two of those conditions: that new negotiations should not simply shift money from defense into other areas but should aim to stimulate the flagging economy; and that they further reduce the deficit, in part through reform of entitlement programs such as Medicare and Social Security.

Rep. Panetta said he took exception only to Mr. Darman's third condition -- that negotiators consider "growth-oriented measures," primarily a cut in the capital gains tax. That also was the principal bone of contention between Democrats and President Bush in the negotiations last year.

Mr. Darman's change of mind about reopening the agreement reflects the growing pressures from both Republicans and Democrats to further slash defense in light of the developments in the Soviet Union, Rep. Panetta said. Republicans want to funnel the savings into deficit reduction and tax cuts, while Democrats generally favor channeling it into domestic programs.

Mr. Darman had previously contended that a presidential election year, with its charged atmosphere and predictable politicking, would be a poor time to try to rewrite the agreement. But Rep. Panetta noted that last year's accord -- the most far-reaching agreement to be reached in years -- was fored in the midst of a congressional election.

Noting that Sen. Phil Gramm, R-Tex. -- one of the chief Republican negotiators -- is now one of the leading proponents for "breaching the walls" of the agreement, Rep. Panetta said, "I don't think we will have the convenience to wait until after the election."

Rep. Panetta presented a 10-year plan, developed at the request of House Speaker Thomas Foley, D-Wash., and aimed at reducing the deficit to less than 1% of GNP. He said he and other budget committee members will amend and refine the proposal, with the goal of presenting it to the President as guidance in developing his own budget for fiscal 1993 and beyond.

Rep. Panetta's plan would cut defense by another $200 billion to $600 billion, reduce entitlement programs by $165 billion to $200 billion, and achieve between $65 billion and $105 billion of savings in other domestic areas, principally through the consolidation of the 14 federal departments into six agencies.

The plan calls for $1 of new taxes for each $2 spending cut, the same as last year's agreement, to raise between $250 billion and $400 billion. It would also selectively increase spending by between $305 billion and $370 billion in high-priority domestic areas such as infrastructure, education, and health care.

The plan would also allow some "tax incentives" for economic growth, but assumes that they would be paid for with revenue increases in other areas, Rep. Panetta said.

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