Conferees OK Fiscal Year Funds : $368-Billion Bill Includes Further Cuts for Pentagon

Congressional negotiators Wednesday night approved a $368-billion omnibus spending package for this fiscal year after trimming an additional $1.3 billion from the Pentagon budget, over President Reagan’s objections, to satisfy liberal Democrats in the House.

The defense cut, which the President is expected to accept reluctantly, was worked out between House and Senate negotiators as part of a measure that will fund the Pentagon and many other major agencies until next Sept. 30, the end of this fiscal year.

“The President will sign it,” declared Sen. Ted Stevens (R-Alaska) after consulting with the White House on the telephone. The overall spending bill still has to be accepted by both chambers in votes today and signed by Reagan before it becomes law.

More Fees for Senators

Senate Republicans were persuaded to accept the cut in defense spending after House Democrats dropped their opposition to a provision that would allow senators to accept an additional $7,510 each year in honoraria for speeches. As a result, total compensation from salary and honoraria for Senate members could rise above $100,000 for the first time in history.

At one point during the negotiations, when Senate members tried to scale back the $1.3-billion cut under pressure from the White House, Rep. David R. Obey (D-Wis.) exploded in anger and threatened to block the honoraria increase.

“If you want to open it up,” he threatened, “we can go back to the honoraria.” His outburst persuaded Senate negotiators to go along with the House position on defense trims.

Ban on Arms Tests

Before the cut Wednesday, the fiscal 1986 defense spending package totaled $298.7 billion--already far below Reagan’s spending request of $322 billion. In addition, the bill bans testing of anti-satellite weapons, a key element of Reagan’s space defense program.

Only one other matter--an extension of the 16-cent-a-pack cigarette tax and other levies and tax credits scheduled to expire as early as tonight--has yet to be resolved before Congress adjourns for a one-month Christmas recess. On Wednesday night, both chambers voted to keep the cigarette tax in force through today while related issues are being resolved.

An earlier spending package approved by the House-Senate committee was rejected Monday night by the full House, forcing the negotiations to be reopened, with new pressure on the Senate to make concessions. Liberal House Democrats said they turned down the agreement because it provided too much for defense.

Later, House members had demanded four major changes in the defense part of the bill: a $1.3-billion cut in defense spending, a continued ban on chemical weapons production, reforms aimed at curbing defense procurement abuses and a promise that the Pentagon will not use $6 billion in unspent money from last year to undercut the intent of a recently enacted balanced-budget amendment.

The final committee agreement incorporates all of these demands except the continued ban on chemical weapons. Instead, the agreement allows the Pentagon to begin producing binary nerve gas, beginning Oct. 1.

Synfuels Guarantees

On non-defense matters, Senate negotiators conceded to the House by agreeing to prohibit the Synthetic Fuels Corp. from approving loan guarantees for two additional oil shale development projects before Congress forces the agency to shut down. Republican Sens. William L. Armstrong of Colorado and Jake Garn of Utah had been fighting for the funding for projects in their states.

Garn argued that the agency, known as Synfuels, already had agreed in principle to fund the projects, but Rep. Silvio O. Conte (R-Mass.) and other House members remained adamantly opposed. The controversial agency will be phased out in 120 days.

In addition, the Senate backed down on a provision that would have written permanently into law a federal incentive for states to raise their legal drinking age to 21. The current law denying some federal highway funds to states with lower drinking ages is scheduled to expire in 1988.

Sen. Frank R. Lautenberg (D-N. J.) warned the negotiators that their decision probably would cost the lives of many teen-agers, who make up a significant number of drunk-driving victims. “I wish we could see in front of us the faces of the young people whose lives we could save,” he declared.

Day of Horse-Trading

The spending package was developed during a full day of emotionally charged horse-trading between the House and Senate as well as between Congress and the White House, and what emerged was a delicate balance between competing interests.

For example, when the House negotiators voted to insist on a chemical weapons ban, Stevens responded with an angry speech threatening to renege on a previous concession to ban anti-satellite weapons testing. The House then agreed to drop its demand.

Less than a half hour before the entire package was finally accepted, White House Chief of Staff Donald T. Regan almost scotched the deal by insisting on some changes involving the $1.3-billion cut in defense. Regan made his proposal in a telephone call to Stevens, but it proved to be too late.

The vote on the cigarette tax, meanwhile, prevented the 16-cent-a-pack levy from reverting to 8 cents at midnight Wednesday.