New U.S. Policy on Contras Told : Bush, Congress Agree to Drop Military Option

Proclaiming a new era of bipartisan foreign relations, the Bush Administration and Democratic congressional leaders Friday announced a new policy for promoting democracy in Nicaragua.

Under the new policy, Secretary of State James A. Baker III told reporters, leaders of the Democratic majority in Congress agreed to provide the Administration with “flexibility” in choosing how to prod Nicaragua toward democracy. In return, the Administration agreed to forswear, at least for now, the military option the Reagan Administration pursued both openly and covertly for eight years.

“We do not claim the right to order the politics of Nicaragua,” President Bush said. “That is for the Nicaraguan people to decide.”

The agreement could bring to an end one of the most divisive foreign policy battles of the last decade, and both Bush and the congressional leaders talked hopefully of setting a cooperative precedent.

‘Necessary Ingredient’

“Bipartisan foreign policy is something that’s essential to a nation of our type,” said House Speaker Jim Wright (D-Tex.). “I think we’re restoring that necessary ingredient.”

Under the new plan, Nicaragua’s Contras will receive an additional $45 million in the 10 months before the Nicaraguan elections scheduled at the end of next February. That is the same level of support the Contras have received under the current aid package that expires at the end of this month.

But the new aid cannot be used for military purposes. Under an agreement signed by Bush and congressional leaders in the White House Cabinet Room on Friday morning, the money will provide food and shelter for the Contras in their Honduran base camps and assist them in “voluntary reintegration” into Nicaraguan society or “regional relocation.”

In the meantime, said Baker the Administration will use non-military “incentives and disincentives” to try to influence Nicaragua. Among the incentives is the possibility of lifting some of the U.S. embargoes that currently hobble Nicaraguan trade.

The possible disincentives are less clear, however. A senior Administration official conceded that for now, “I can’t say that we contemplate any.”

“We’re saying, ‘OK, let’s go, let’s put our chips on diplomacy,’ ” the official said. “If it’s demonstrated that it doesn’t work, then there would be a more conducive climate” for some alternative.

The Nicaraguan government said in a statement from Managua that it considers the new approach an improvement over the policy of the Reagan Administration.

Bid to Save Face

“We are not unaware that this type of bipartisan declaration was precisely what the United States government believed necessary to save face” after its previous failures, the Sandinista regime said. It said that it is “willing to give the United States government the benefit of the doubt” that serious efforts toward a diplomatic solution will be made.

In Honduras, where most of the Contras are now sheltering in camps across the border from Nicaragua, Foreign Ministry spokesman Eugenio Castro was quoted by Reuters, the British news agency, as saying that the government, a close U.S. ally, supports the continuation of humanitarian aid as a means of preventing the rebel army from disintegrating into guerrilla bands. But he denied that the government had agreed to let the rebels stay until next February.

“Even though the aid has been approved until February that doesn’t mean the Contras are going to stay until February,” Reuters reported Castro as saying.

The news agency said Castro noted that the aid could also be used to demobilize and resettle the rebels, and that a timetable for such disbanding would depend on Central American presidents, who are due to meet in Honduras in May.

Months of Discussions

The agreement between the executive and legislative branches came after months of bipartisan discussions that began almost immediately after the presidential election and ended only late this week.

“It was two days after the election that I had a conversation with then President-elect Bush and we discussed the possibility of a bipartisan policy in Central America,” Wright said Friday. In December, Wright discussed policy options with Baker over dinner and since then Baker has devoted much of his time to working out an agreement that he can now point to as the first major accomplishment of his term as secretary of state.

By last week, Baker had worked out the general terms of an accord with Senate Democrats and a group of moderate House members, but more liberal members of the House who have opposed Contra aid were not yet sold. The final breakthrough came in a meeting last Friday in Wright’s office attended by the Speaker, Baker, House Majority Leader Thomas S. Foley (D-Wash.) and Rep. David Obey (D-Wis.), chairman of the House subcommittee that oversees foreign programs.

Administration Agrees

Obey insisted that Congress retain the right to kill the aid program if the Administration did not live up to its end of the bargain. On Wednesday night, Bernard Aronson, Baker’s choice to be assistant secretary of state for Latin America, called Obey to say that the Administration had agreed to that provision.

Under the agreement, Baker has sent a letter to Obey; his Senate counterpart, Daniel K. Inouye (D-Hawaii), and the chairmen of the House Foreign Affairs and Senate Foreign Relations committees promising that money for the Contras “will not be obligated after Nov. 30” without the written approval of the congressional committees.

In practice, said Obey, “absent some unanticipated change” in Administration policy, that approval will be readily forthcoming. But Democrats, still feeling burned by the Reagan Administration’s covert efforts for the Contras, felt the need for that final provision as a “safety valve.”

Since the announcement of the package came after most members of Congress had left Washington for the Easter recess, reaction was muted. But backers of the plan, and even some of its opponents, predicted that it would prevail swiftly after Congress returns next month. Still there was dissatisfaction among some strong Contra supporters and some of their most ardent foes.

“I don’t like it,” said California Rep. Barbara Boxer (D-Greenbrae), one of Congress’ most adamant Contra opponents. “This agreement keeps them as a standing army,” she said. But, she conceded: “Right now I think it will pass.”

A similar prediction came from Senate Republican leader Bob Dole of Kansas. “Not every Republican senator is enthusiastic about this,” he said, noting that some of his more conservative colleagues worry that the plan will allow Contra opponents “to eliminate or take care of the Contras through relocation rather than . . . democracy in Nicaragua.” But most, he suggested, would follow the President’s lead.

And on the House side, Rep. Mickey Edwards, a conservative member of the Republican leadership from Oklahoma and a chief supporter of the Contras, predicted “near unanimous” support for the plan in GOP ranks.

Aid Linkage Cited

“It’s not the program I would have written,” Edwards said, but it is “more than we could have gotten otherwise.” Most importantly from his standpoint, Edwards said, the new policy statement explicitly links aid to the Contras with Nicaragua’s willingness to continue democratic reforms. Nicaraguan officials, he said, have been trying to separate the two, saying that the Contras should be disbanded first with full democracy to follow later.

If the new policy achieves even partial success in its twin goals of moving Nicaragua toward democracy and reducing Soviet influence in Central America, it would provide the Administration with a foreign policy triumph that eluded two American presidents, Ronald Reagan and Jimmy Carter, in the decade since the Sandinistas overthrew the late dictator Anastasio Somoza.

But even in advance of any results, the declaration of the new policy achieved one significant victory for the new Administration. For four years, Contra aid has been a constant battle, in large part because “there was an element of distrust toward President Reagan” on the part of Democrats, said Edwards, “a belief that he would not keep an agreement to end aid.”

On Friday, by contrast, Senate Majority Leader George J. Mitchell (D-Me.) set a far different tone: “I trust the President and the secretary of state,” he said.

Times staff writer Josh Getlin contributed to this article.