Differences Over Moscow’s Powers Slowing Union Treaty, Yeltsin Says

Russian Federation President Boris N. Yeltsin said Wednesday that significant differences remain to be resolved on the shape and powers of the Soviet Union’s future federal government before a treaty, intended to hold the country together, can be signed.

Yeltsin said the most contentious points include the central government’s ability to levy taxes and the division of powers between it and the country’s constituent republics, nine of which are expected to remain part of the Soviet Union.

Although Yeltsin spoke of the broad measure of understanding he has reached with Soviet President Mikhail S. Gorbachev on the political and economic issues facing the country, he was nevertheless warning that much more hard bargaining lies ahead on the treaty if the country’s rapid disintegration is to be halted.

The Union Treaty, the draft of which will be published today for debate, will lay a new political foundation for the country and thus is a key element in Gorbachev’s strategy to keep the Soviet Union from fragmenting into 20 or more pieces and to halt its steep economic decline.

As prepared for publication, the draft treaty gives the republics greatly enhanced status--even changing the country’s name to the “Union of Soviet Sovereign Republics,” dropping “Socialist” in favor of “Sovereign.”

The draft drops all references to Communist ideology, sets forth democracy and human rights as the country’s goals and attempts to strike a careful balance between the central government’s need for sufficient powers to hold the world’s largest country together and the republics’ increasing desire for autonomy.

The treaty attempts to maintain a common economy, giving the central government authority over the country’s finances, but it gives the republics control of their natural resources. Under the treaty, the central government would be headed by a directly elected president, a first here.

Six republics--the Baltic states of Estonia, Latvia and Lithuania, the southern republics of Armenia and Georgia and Moldova on the Romanian border--have refused to participate in drafting the treaty but would be bound under existing legislation, which provides for a five-year secession period.

Gorbachev last week hailed the agreements he has reached in the last two months with republic leaders, saying he hopes the treaty can be signed in late July. A new constitution would then be drafted and debated and, finally, elections would be held for the Soviet presidency and for Parliament.

But the Russian Federation and the Ukraine, the second-largest Soviet republic, both have major objections, opposing direct taxation of enterprises by the central government. They advocate republic taxation with the remittance of funds by the republics to Moscow.