Senate Version of Deficit Cuts Voted by House

WASHINGTON — The House, weary from more than three months of bickering with the Senate over a deficit-reduction bill left over from last year’s budget resolution, gave in Thursday night and agreed to the Senate version.

Voting 230 to 154 over the objections of its Democratic leadership, the House agreed to a package that would settle a federal-state dispute over revenues from offshore leasing and distribute to coastal states more than $6 billion that has accumulated in escrow since 1978. California’s initial share under the distribution proposal would exceed $400 million.

The bill also would make permanent the 16-cent-a-pack federal cigarette tax, which reverted to 8 cents last Friday.

White House Opposition Cited

One force working in favor of the Senate version was an indication from the White House that it would not accept the House proposal. The bill contains $6.9 billion in spending cuts and revenue raisers called for in the fiscal 1986 budget resolution approved by Congress last year. It would cut the deficit by $26 billion over the next three years.

The version approved Thursday deleted a House-passed provision that would give coastal state governors greater leverage over federal leasing activities off their shores--a provision that had been supported vigorously by both California senators and almost all the state’s Democratic House members.

“Our delegation feels we’ve been stiffed,” California Rep. Vic Fazio (D-Sacramento) complained after the vote. Rep. Tony Coelho of Merced was the only California Democrat voting for the Senate version.

However, almost all the state’s Republican congressmen supported the Senate plan. “These are obviously federal lands,” over which the states should claim little jurisdiction, California Rep. Norman D. Shumway (R-Stockton) said. Rep. Al McCandless of Bermuda Dunes was the lone California Republican opposing the package.

The version approved and sent to President Reagan rejected other provisions that the House initially had wanted, including a requirement that states provide payments under the Aid to Families With Dependent Children program to two-parent households. States now may choose to do so, but are required only to include one-parent families in the program.

Delay in Penalties OKd

The final version of the bill also included a provision, engineered by California Rep. Robert T. Matsui (D-Sacramento), that would delay for two years the imposition of penalties for errors committed in administering the AFDC program. The Reagan Administration had assessed $108.9 million in penalties against California for errors that the government contended were committed between 1981 and 1984.

The Senate bill would provide smaller increases in payments to hospitals through the Medicare program than the House’s initial plan and rejected House proposals to expand Medicare’s home health, medical education and vision care services.

House Democratic leaders were particularly critical of little-noticed language in the Senate bill that would hasten the transition of Oregon hospitals to a national Medicare payment system that pays flat rates for specific illnesses, rather than daily costs. The provision reportedly was requested by Sen. Bob Packwood (R-Ore.), chairman of the Senate Finance Committee, and was projected to bring hospitals in his home state a windfall of up to $20 million.