WASHINGTON _ House-Senate conferees settled for a middleground in deciding how big the tax cuts package should be. However,the compromise crafted in late June may paper over fundamentaldisagreements among Republicans in Congress over whether to cutthe deficit first and focus on tax cuts later.

At risk for biotechnology firms are capital gains tax cuts that wouldencourage investment in small corporations.

Enactment of capital gains legislation is a priority for theBiotechnology Industry Organization (BIO).

But one proposal sponsored by Sens. Orrin Hatch (R-Utah) andJoseph Lieberman (D-Conn.) has a $60 billion price tag, a cost thatmay prove too high if Congress is looking for ways to reduce thefederal deficit, congressional sources told BioWorld Today.

While the House and Senate did compromise on the overall size oftax cuts, their original budget resolutions reveal divergent ideologies.

The House, led by Budget Committee Chairman John Kasich (R-Ohio), wrote a budget plan that contained $350 billion in tax cuts,featuring a $500-per-child tax credit, a reduction in capital gainstaxes and other measures.

The Senate plan endorsed only $170 billion in unspecifiedreductions.

When House and Senate tax committee members return to work aftertheir Fourth of July recess, they will have to confront the differencesin the Republican Party over how to proceed. Some members of theSenate want to consider tax cuts only after the federal budget isbalanced, but Kasich and his allies contend simultaneous tax cuts andspending reductions can be achieved. _ Michele L. Robinson

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