Both Houses Vote Debt Limit Hike : Differences Must Be Resolved; Reagan Will Sign Measure, White House Says

Times Staff Writer

Congress was poised to avert a threatened cash crisis Wednesday night as the House and Senate both voted monthlong extensions of government borrowing power and headed toward final action on the measure today.

The White House said President Reagan would sign the temporary extension.

By a vote of 300 to 121, the House passed a measure backed by both Democratic and Republican leaders that would grant the Treasury $80 billion in new borrowing authority, enough to cover government expenses through Dec. 13.

Late Wednesday night, the Senate by a voice vote passed a similar measure that sets the cutoff date at Dec. 6, although, because of cash flow considerations, it would ensure that government spending power would last until Dec. 12. Differences over the cutoff date still must be resolved with the House today.

Pressure on Conferees

"I think we're going to do something," Sen. Warren B. Rudman (R-N. H.) had predicted before the Senate vote. Rudman and Sen. Phil Gramm (R-Tex.) had used the prospect of a debt crisis Friday to increase pressure on House-Senate conferees to act on their plan to force a balanced federal budget by 1991.

But now "we think we're making substantial progress" in negotiations on the balanced-budget controversy, Rudman said. "That being the case, why not agree to an extension" of federal borrowing power?

Earlier, Gramm and Rudman had grudgingly dropped their opposition to a stop-gap debt-limit increase, indicating that they would go along with the short-term increase because they did not want domestic money issues to hamstring President Reagan at his summit meeting with Soviet leader Mikhail S. Gorbachev in Geneva next week.

"We believe that we can't have a cloud of fiscal collapse hanging over the President's head as he goes to Geneva," Rudman said.

As Congress was acting, the White House had continued to insist that it wanted a permanent resolution of the debt and balanced-budget questions by today.

Budget Director James C. Miller III, at a White House briefing, had declared that "Congress would be abdicating its responsibility to deal realistically with the deficit" if it passed such a short-term measure.

Nevertheless, White House spokesman Larry Speakes had refused to comment when asked whether Reagan intended to veto a temporary debt hike.

Reagan Accepts Action

"The President accepts the obvious sentiment of both houses of Congress, but it is with reluctance. He will continue to urge Congress to pass legislation that will balance the federal budget . . . " a White House spokesman said after the bills were passed.

Earlier, Speakes had announced that all federal agencies had been ordered to stop issuing checks if government borrowing power did run out Friday. The first casualty of such a cash shortage would be a $16-billion interest payment on government debts.

"The government would continue to function, but it would temporarily stop paying its bills," Speakes told reporters. "We are not going to issue checks that will bounce."

Partisan bickering over the Senate-passed Gramm-Rudman plan and a competing version passed by the Democratic-led House has delayed action for more than five weeks on legislation to raise the national debt limit to more than $2 trillion from $1.8 trillion.

Social Security Tapped

As the dispute continued, the Treasury Department dipped into the Social Security trust fund and two other federal pension funds to pay government bills. The measure passed Wednesday requires the Treasury to pay back to the funds the interest they lost as a result.

Conservative House Republicans decried Wednesday's debt ceiling action as a gutless move. "The fact is we don't have the courage to really make the cuts needed to balance the budget," California Rep. Douglas H. Bosco (D-Occidental) declared. "There will always be another Geneva."

But House Minority Leader Robert H. Michel (R-Ill.), who said he otherwise would oppose the stopgap bill, insisted that he was worried about undercutting Reagan's bargaining position at the summit and was not trying to finesse the politically thorny debt question.

"I'm not about to send my President abroad and have us cut the ground out from under him a few days before that meeting," Michel argued on the House floor.

Temporary Funding

In related action, the Senate on a voice vote endorsed and sent to Reagan a House-approved measure that provides temporary funding for virtually all government agencies through Dec. 12, and the House approved an extension of the 16-cent-a-pack cigarette tax through Dec. 14.

Without such action, federal agencies would have run out of spending authority today, and the cigarette tax, estimated to bring in $4.9 billion over the next three years at its present level, would have reverted to 8 cents a pack.

Oil-Drilling Moratorium

Included in the continuing resolution is a temporary extension of the moratorium on offshore oil drilling on the California coast. The moratorium, originally scheduled to end on Oct. 1, is part of an Interior Department appropriations bill.

The tobacco tax measure, meanwhile, is expected to get Senate approval, although Reagan's reaction to it is unclear. The tax initially had been scheduled to be cut by half on Oct. 1, but the President signed a 45-day extension of the 16-cent levy. However, he expressed opposition to permanent retention of the higher tax.

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