WASHINGTON – Congressional negotiators conceded Friday that despite two weeks of closed-door bargaining they have made little progress in bridging major differences over an overhaul of the nation’s spy agencies.

Sen. Susan Collins, the Maine Republican who crafted the Senate’s bill, said it was “very disappointing” that compromise has proved elusive. She reiterated her fear any reform effort will be doomed if it is pushed into a new session of Congress.

“I am pessimistic that if we have to start all over again next year that we would be successful,” she said.

“We are fast learning there are reasons that intelligence reform has been blocked over the past 50 years time and time again. It is extremely difficult to accomplish,” she added.

Collins and the three other four principal House and Senate negotiators insisted their stalemate has not doomed the possibility Congress still could implement the Sept. 11 commission’s recommendations this year.

“We believe that it is possible – it is difficult, but it is possible – that a bill can be completed,” House Intelligence Committee Chairman Peter Hoekstra, R-Mich., said on a conference call with the other lead negotiators.

Still, he acknowledged an impasse remains on the most vexing issue: how much budget and personnel authority to grant a new national intelligence director.

Though they initially hoped to have a bill on President Bush’s desk before Election Day, they now are setting their sights on finalizing a package for Congress to consider when it returns for a lame-duck session in mid-November.

House Republicans, deferential to the Pentagon’s view, insist the Defense Department must retain significant control over its piece of the intelligence puzzle – which accounts for 80 percent of U.S. intelligence spending. Any muddling of the military intelligence mission could harm troops in the battlefield, the Pentagon and its defenders say.

But the Sept. 11 commission and Senate negotiators, Republican and Democrat, insist the only way to remedy the miscommunication and missed handoffs evident after the Sept. 11 attacks is to give an intelligence czar a strong voice in how intelligence assets, military and civilian, are deployed.

Hoekstra described the gulf between the House and Senate as “a rather significant gap.”

House Republicans planned to send over their latest offer on Friday and hoped for a Senate counteroffer next week.

Their newest offer would jettison a few of the controversial House provisions on immigration and law enforcement not found in the Senate bill. Among them: A provision making it easier to deport illegal immigrants without court review; and new death penalty sanctions for terrorists beyond those already on the books. In an effort to make their offer more palatable to Democrats, the GOP plan would raise the cap from 10,000 to 20,000 yearly on the number of asylum holders granted legal permanent residence.

Sen. Joe Lieberman, D-Conn., urged negotiators to put aside their differences.

“In this case, the quest for the perfect may well be the enemy of the safety and security of the American people,” he said.

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