CONGRESS /IN THE HOMESTRETCH : Turmoil in the Gulf Reshapes Political Landscape on the Hill : The crisis is forcing a new agenda on lawmakers. It may strengthen Bush’s hand and lower budget-cutters’ goals.

The Middle East crisis promises to revamp much of the agenda of the 101st Congress as it starts down the homestretch today.

Iraq’s invasion of Kuwait hit just before lawmakers went on their August recess, and they are returning in a far more anxious mood.

The changes are expected to affect both substance and scheduling on everything from deficit-reduction talks to weapons programs, from the clean air bill to President Bush’s nomination of New Hampshire jurist David H. Souter to the U.S. Supreme Court.

Larry Sabato, a political scientist at the University of Virginia, believes that Bush’s widely praised handling of the Persian Gulf crisis “probably will strengthen his hand in almost all matters” before Congress, including persuading lawmakers to sustain any new vetoes.

Bush has been successful on all 13 of his vetoes to date.

Senate and House Democratic leaders generally disagree that the President has been bolstered all that much in the legislative arena. But House Budget Committee Chairman Leon E. Panetta (D-Carmel Valley) suggests that the gulf turmoil may help reduce the frequent partisan wrangling that has occurred between Congress and the President.

“The bipartisan support for the President forces both parties to recognize that they are better off if they work together rather than fight each other over the remaining weeks of the session,” said Panetta, who is a former Republican.

Lawmakers and aides say the Middle East flare-up undoubtedly will prolong the debates over how to reduce the budget deficit and how to reshape the nation’s defense program--possibly squeezing immigration, child care and other bills off the calendar.

However, high-priority civil rights, anti-crime, farm and housing measures are not likely to be affected.

At the same time, crisis-generated pressures on the economy may undercut legislation that is costly to business, such as the sweeping rewriting of the Clean Air Act. Also in question is whether Congress will be able to adjourn sometime in October or will be forced to return for a lame-duck session after the November elections--possibly to consider a pay raise and a limit on honorariums for senators.

The Budget Deficit

In the most dramatic impact of the crisis, Administration and congressional negotiators seem likely to sharply lower their goal for reducing the federal deficit, which many analysts believe will soar above $200 billion for the fiscal year that begins on Oct. 1.

Deep defense cuts and a large energy-tax increase--once seen as key components of a budget deal--now are in doubt, reflecting worries about a possible recession, increased fuel prices and the huge Desert Shield deployment of U.S. forces in the Middle East.

The deficit-reduction talks over the last several months have been aimed at cutting the fiscal 1991 deficit by $50 billion--25% of it from cuts in defense spending, 25% in domestic program cuts and 50% in “revenue increases.”

Now, with the prospect of reduced defense cuts and smaller tax increases, strategists say the deficit reduction may total as little as $25 billion--because there is scant political support for bearing down more heavily on domestic programs such as Medicare and Social Security.

“Defense is the key because defense tells you, at least from a fairness point of view, what kind of contribution you can look for from the other areas,” Panetta said.

At any rate, the one-time giddy talk of a “peace dividend” for social and environmental causes is gone. “The thief of Baghdad has stolen our peace dividend,” Rep. Robert J. Lagomarsino (R-Ojai) lamented.

Weapons Programs

Advocates of besieged weapons programs, from the B-2 Stealth bomber to the C-17 cargo plane and “Star Wars” missile interceptors, are hoping for a new boost from the Middle East crisis as the military policy bills enter their crucial final stages.

The best example is the bat-wing, radar-eluding Stealth aircraft. In July, the House Armed Services Committee voted overwhelmingly to end B-2 production at the 15 planes that had been funded.

But, in August, right after the Iraqi invasion, the Senate voted narrowly to fund two new planes in 1991--consistent with Bush’s plan to reduce the total purchase to 75 from 132 and to trim total costs to $61 billion from $72 billion.

B-2 supporters believe they now have the momentum to prevail in a looming Senate-House conference showdown between Sen. Sam Nunn (D-Ga.) and Rep. Les Aspin (D-Wis.), the chairmen of Congress’ Armed Services committees.

The Air Force has begun a new lobbying effort to save the B-2, which is being built at Northrop Corp. plants in Pico-Rivera and Palmdale, Calif.

Hawkish Rep. Norm Dicks (D-Wash.), a key member of the House defense appropriations subcommittee, emerged from an Air Force briefing last week declaring that “if we had had the B-2 when Iraq invaded Kuwait, we could have had incredible capability to go after targets deep within Iraq.”

“It would have given the President another option that might have shocked (Iraqi President Saddam) Hussein and brought this matter to a close,” he said.

Although the bomber was designed primarily to penetrate Soviet airspace in a nuclear war that now seems remote, Dicks says that the B-2 could have taken off from its Missouri base, been refueled by aerial tankers on the way to Iraq and then bombed chemical and nuclear weapon plants and other targets--including Hussein’s headquarters--before landing at Diego Garcia, a U.S. base in the Indian Ocean.

Rep. John R. Kasich (R-Ohio), who, with Rep. Ronald V. Dellums (D-Berkeley) is leading a fight to halt B-2 production, says he will argue that nothing has changed for the bomber’s future.

“I think the (gulf) crisis will probably increase overall defense spending,” Kasich said. “And, as long as the increases are on things like readiness, training and weapons with greater mobility and flexibility, fine.

“But,” he added, “the idea we should commit ourselves to a bunch of new Cold War weapons would be a big mistake.”

Other Issues

Emissions laws. A proposed tightening of Clean Air Act restrictions on motor vehicle and industrial emissions, now in a House-Senate conference, also could be affected by the Middle East troubles.

“The bill could be undermined because of the new concern over energy and the degree to which the gulf crisis, along with other economic trends, are pushing the economy closer to a recession,” one key congressional aide said.

“The crisis helps out people who are concerned about increased costs to business and the impact on coal miners” threatened by crackdowns on coal-burning plants.

On the other hand, Rep. Henry A. Waxman (D-Los Angeles), who is the bill’s prime mover in the House, argues that the case for strengthening alternative-fuel provisions has improved in light of the new danger to oil supplies.

Increasing the use of cleaner-burning, domestically produced ethanol and methanol would “benefit the environment and lessen dependence on imported oil,” Waxman contended.

Souter nomination. Meanwhile, some think the Souter nomination, which is being challenged by abortion rights advocates wary of his vague views, might have calmer sailing now.

“My guess is it will be a lot less controversial than otherwise because, at a time of national crisis, people will not be looking for a reason to divide the country,” political analyst Sabato said.

But an aide to Senate Judiciary Committee Chairman Joseph R. Biden Jr. (D-Del.), who will preside over confirmation hearings that begin Sept. 13, insists that the conservative New Hampshire jurist still will be scrutinized closely.

Energy policy. The invasion of oil-rich Kuwait is almost certain to heat up the moribund debate over energy policy, reverberating in debates over the Strategic Petroleum Reserve and offshore oil and gas drilling on public lands.

Related Senate and House bills call for expanding the oil reserve at costs opposed by the President.

Congress has a lot more on its plate, from re-regulation of cable television to a significant increase in the number of visas to be granted to legal immigrants--particularly Europeans--who are being kept out by the current system.

As always happens, Congress will not be able to digest many major bills before it adjourns, and leftovers will have to be reintroduced in the 102nd Congress. But there’s no doubt that the problem has been compounded by the current international crisis.

“A lot of the agenda has been knocked into a cocked hat to no one’s apparent benefit,” sighed a House leadership aide.