Contra Deal May Rescue Funding Bill : Congress to Meet Today to Prevent Federal Shutdown

Congressional leaders and top White House officials tentatively agreed late Saturday on a complex scheme for delivering about $8 million in non-lethal aid to the Nicaraguan rebels, paving the way for passage of a massive spending bill needed to fund most federal agencies for the next nine months and apparently averting a government shutdown.

The House and Senate are expected to meet today in a rare Sunday session to pass a one-day stopgap spending measure to keep the government operating Monday and give both houses of Congress an opportunity to approve the agreement.

Although the government technically ran out of money on Saturday, few effects were felt.

Several provisions of the $600-billion spending legislation remain unresolved, but the apparent Contra aid agreement removes the largest single stumbling block.

Test of Reagan’s Leverage

President Reagan had threatened to veto the measure unless it contained what he considered an adequate amount of Contra aid, and Republicans had portrayed the struggle as a crucial indicator of how effective the President will be in dealing with a Democratic Congress in the final year of his term.

In the end, it appears that Reagan will get only half of the roughly $16-million Senate package that he had said was the minimum he would accept. The package tentatively agreed on Saturday night would provide the Contras with $3.6 million in supplies such as food, clothing and medicine--enough, it is estimated, to last them through the end of February. When the cost of transporting the goods is added, the package totals about $8 million.

Baker at Negotiations

But Administration officials, headed by White House Chief of Staff Howard H. Baker Jr., won important concessions during six hours of closed negotiations on a stickier issue: the conditions for delivering that non-lethal aid, along with stockpiled military supplies, at a delicate stage of the Central American peace process that began in August.

Peace Formula Sought

House Speaker Jim Wright (D-Tex.) said both sides were “trying to find a formula by which you give an incentive to both the Contras and the Sandinistas . . . to make peace.”

Under the arrangement, the U.S. government can continue until Jan. 12 to deliver weapons that were purchased before military aid was cut off last September and are now stored in Central American warehouses. Those stockpiled weapons would be mixed with the loads of non-lethal supplies.

However, the military component of the shipments will be interrupted for at least a week during a critical meeting of Central American presidents at which the leaders will review the progress of initiatives taken under the regional accord.

The military shipments then could be resumed temporarily if Reagan determines that Nicaragua’s Sandinista government has been responsible for the failure to achieve a lasting cease-fire. Congress would not have a chance to stop the flow of weapons until Feb. 4.

A little more than a week ago, the political momentum on Capitol Hill had been moving against allowing any resumption of Contra aid. However, reports last weekend that the Sandinsta government was planning a huge military buildup, envisioning a 600,000-man army, appeared to have swung votes the other way.

Has Deficit-Reduction Pact

Along with funding the government through next September, the $600-billion spending bill 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.

Impasse Creates Logjam

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.

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

‘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.