Deal Sought Over Funds for Contras : Federal Shutdown Looms as Congress Awaits Money Bill

With the prospect of a federal government shutdown looming, congressional leaders huddled with top Reagan Administration officials late Saturday night in an attempt to strike a deal on adding aid to the Nicaraguan rebels to a massive bill funding most federal agencies for the rest of the fiscal year.

“We’ll get an agreement. I don’t know when it will be,” White House Chief of Staff Howard H. Baker Jr. said as he rushed into the hastily called meeting on Capitol Hill. The government, meanwhile, technically ran out of money, although few effects were likely to be felt unless the stalemate continued until Monday.

House and Senate members stood ready to meet in a rare Sunday session today to vote on any agreement produced by the negotiations, in the hope of averting the confusion a temporary shutdown would create.

Rebels Are Key Issue

How much aid to provide the rebels and, just as importantly, the conditions under which the aid and supplies would be delivered were the most crucial of several issues that remained to be resolved before both houses could vote on the legislation.

The Senate had approved spending $9 million for non-lethal supplies, plus $6 million or $7 million to transport them. President Reagan has said that package is his bottom line.

By comparison, the House had insisted it would allow no more than $5.5 million to be spent on both supplies and transportation.

The Contras have received no new military aid since their last package expired Sept. 30

Although the additional money would be spent only on non-lethal supplies, such as food and medicine, the law now allows the CIA to mix such loads with weapons that were bought under previous spending bills but not yet delivered.

Threat to Peace Plan Feared

Current authorization to carry these mixed loads would expire on Jan. 1, and House Democrats argue that extending it would jeopardize the fragile Central American peace process that began with a regional accord last August. Contra aid supporters, however, argue that this would amount to disarming the rebels, whom they credit with pressuring Nicaragua’s Sandinista government to the negotiating table.

At stake in the negotiations was the fate of a $600-billion spending bill that also carries out part of a deficit-reduction agreement reached last month after weeks of negotiations between the White House and Congress.

That agreement, a response to the Oct. 19 stock market collapse, sketched a plan to cut $30 billion from this year’s projected $180-billion deficit, leaving a shortfall about equal to the $148 billion recorded for the fiscal year that ended Sept. 30. Over two years, it would reduce the deficit by $76 billion.

The huge spending bill is necessary because lawmakers were unable to agree with Reagan until November on an overall fiscal plan. As a result, all other measures that were contingent on that plan simply backed up.

Almost every year, the logjam becomes worse. The messy annual exercise of writing the massive spending bill, rolling all of the government’s regular appropriations measures into one, has become a sore point with the President, as it is with many in Congress.

“Each year, I’m given a choice. Hold my nose and swallow it whole . . . or veto the entire bill, closing down much of the federal government,” Reagan complained in his Saturday radio address.

Repeatedly Threatens Veto

This year, he has warned repeatedly that he would choose the second option--despite the chaos it would create--unless Congress met certain conditions. Among them were providing what he considers adequate support for the Contras and abandoning an effort to write into law broadcasting’s so-called Fairness Doctrine.

The doctrine, which requires broadcasters to offer opposing viewpoints access to the airwaves, was enforced by federal agencies for almost four decades until it was rescinded earlier this year by the Reagan Administration. The President already has vetoed one piece of legislation that would have made it law.

House and Senate negotiators tentatively voted to include the doctrine in the spending measure, forcing a showdown with the President, but may back down from that position if they can reach a deal with Reagan on funding the Contras.

The President indicated in his radio address that aid to the Contras was his foremost concern.

sh ‘Support Is Imperative’

“The freedom fighters brought the Sandinistas to the negotiating table; only the freedom fighters can keep them there. That’s why our continued support is imperative and why I will insist that the continuing resolution contains adequate funding for adequate aid,” Reagan told his audience.

“If the President wants to shut the government down because he wants an open checkbook for the Contras, that’s his problem,” said Sen. Tom Harkin (D-Iowa). Opponents of further aid to the rebels argue that it would hurt the peace process, rather than help it along as Reagan claimed.

Because none of Congress’ 13 regular spending bills have been signed into law, the government has been operating since the Sept. 30 end of the last fiscal year on a series of stopgap measures. The last of those expired at midnight Friday, which meant that federal agencies were technically without funds.

The game of chicken between Congress and the White House had little effect Saturday. Despite ominous warnings from some government officials, there was no shutdown of popular Washington tourist attractions, such as the Washington Monument, and the Lincoln and Jefferson memorials. Postal service went on as usual.

Some Supposed to Leave Work

Essential government workers, as determined by each agency, continued to work Saturday, but non-essential employees were supposed to leave work by noon.

“We are shut down,” declared Barbara Clay, speaking for the Office of Management and Budget. But the announcement was somewhat moderated by Interior Secretary Donald P. Hodel, who told United Press International the monuments were staying open, for the weekend at least, because the agency believes that Congress will pass the catch-all spending bill before Monday.

“It would be very disruptive for people who may have saved for years to come to Washington at this time to see the monuments, to shut them down for this temporary interruption,” Hodel said.

If Congress does not approve a funding bill, budget officials said Saturday, the first impact of any government shutdown should be felt on Monday. Non-essential employees, they said, are supposed to be barred from their workplaces even if they want to work.

Essential employees will be paid, but any non-essential workers who have worked since noon on Saturday will be paid only if Congress approves. In past shutdowns, Congress has voted the money for such payments.

Second Set of Negotiators

Meanwhile, a separate set of House and Senate negotiators continued trying to resolve their remaining differences over a second bill that would carry out the remainder of the deficit-reduction agreement. It seeks to reduce the shortfall by $22.6 billion this year through a combination of higher taxes, cuts in federal benefits programs, sale of federal assets and other measures.

Already agreed on are $9 billion in higher taxes this year, the bulk of which would fall on corporations and wealthy individuals.

Still open, however, were the questions of cutting postal spending, Medicaid and Medicare.

Staff writer Tom Redburn contributed to this story.