Lawmakers Returning to Cope With a Changed World : Congress: Pressing domestic issues are likely to be eclipsed by global events. How to finance aid to Soviets is a key issue.

Congress returns from its summer recess next week to confront the political and policy implications of a world that has been dramatically transformed during the month that lawmakers have been away from Capitol Hill.

A long list of domestic issues still crowds the agenda of the 102nd Congress--ranging from abortion, bank reform and civil rights to tax fairness, dwindling unemployment benefits and protection for wetlands.

But, just as Congress’ legislative agenda was overshadowed by the war in the Persian Gulf during the first part of this year, domestic concerns are likely to be eclipsed by world events for the remainder of the session, which will be resumed when the Senate reconvenes Sept. 10. The House follows a day later.

Indeed, the world has been transformed not merely once but twice while the lawmakers have been on vacation. First, there was the military coup in the Soviet Union and, with it, the specter of a sudden return to the Cold War.

Then, just as swiftly, came the failure of the coup, the collapse of communism, the rapid unraveling of the Soviet Union itself and the hope that a really new order may finally emerge to reshape the world as no other event has since World War II.

“When Congress returns from its recess, it returns to a different world,” Sen. John C. Danforth (R-Mo.) said.

With events still unfolding in the Soviet Union, the debate that will emerge in Congress over the next few weeks has yet to come into focus. But a few general outlines already are apparent.

The moment they return, lawmakers will throw themselves into the debate over what kind of aid the West should provide to the Soviet Union, how fast to deliver it and to whom it should go--the crumbling remains of the Soviet Union or the republics pressing for independence.

Most analysts expect to see a strong bipartisan consensus in favor of assisting the Soviet Union’s reform-minded leaders with grain credits and other forms of humanitarian aid this winter.

But lawmakers are likely to be split sharply over the question of longer-term economic aid, including what kind of conditions the United States should attach to it and how to get around the spending limits imposed by last year’s budget agreement.

Two key Democrats, House Majority Leader Richard A. Gephardt of Missouri and House Armed Services Chairman Les Aspin of Wisconsin, have proposed taking $1 billion to $3 billion from this year’s $291-billion defense bill to finance the Soviet aid package.

On the Republican side, Missouri’s Danforth also is calling for defense budget cuts.

But these proposals, already dismissed as premature by the Bush Administration, are certain to stir controversy.

Resistance will come both from Republicans who oppose further defense cuts and from Democrats who argue that domestic spending ought to receive priority if last year’s budget discipline is going to be breached.

Fearing that one exception to the budget limits will lead to more, even those lawmakers who support increased aid to the Soviet Union and to the newly independent Baltic states argue that it should not be financed by raiding other spending categories.

“There are going to be efforts to find money not only for the Soviet Union but for a number of domestic programs,” noted one California legislator, House Budget Committee Chairman Leon E. Panetta (D-Carmel Valley).

“But we really ought to think twice before we get rid of the only fiscal discipline we have in Washington right now,” Panetta said.

Sen. Patrick J. Leahy (D-Vt.), chairman of the Senate Appropriations subcommittee that sets foreign aid, agreed. “We don’t have a hell of a lot of money to spend,” he said.

Although it may be an encouraging time for the forces of democracy around the world, the political fights shaping up on Capitol Hill this year are likely to reflect the fact that the same cannot be said for Democrats back home.

Indeed, there is a bitter joke making the rounds of the Capitol this election eve year: Question: How do you form a Democratic firing squad? Answer: Form a circle.

The acerbic humor reflects the fact that, try as they might, the Democrats cannot seem to forge a clear consensus on the major issues this year.

Worse, the Democrats’ attempts to refocus public attention on domestic issues where polls show that the Bush Administration is the weakest have been repeatedly frustrated--first by events in Eastern Europe, then by the Persian Gulf crisis and now by the turmoil in the Soviet Union.

“There is confusion and disarray throughout Democratic ranks, and the recent events in the Soviet Union can only add to it,” University of Virginia political scientist Larry Sabato said.

“Clearly, the Democrats are very frustrated, because every time they say that foreign policy doesn’t matter, along comes another foreign policy crisis.” Sabato said.

Panetta conceded that the succession of international crises has kept the public’s attention focused on Bush’s strong points, but he insisted that Democrats can still use their majority in Congress to “refocus” the debate on economic and social needs at home.

“What we cannot do any more is to let Bush constantly set the agenda on the basis of foreign issues,” he said.

Senate Majority Leader George J. Mitchell (D-Me.) said that, between now and next November’s presidential elections, he expects Democrats to be in a strong position to exploit what could be a domestic backlash to Bush’s preoccupation with foreign affairs.

Events in the Soviet Union may be the focus of American press attention, “but they are not the main focus of the American people,” Mitchell asserted.

“I’ve been in my state for a month now, and everywhere I go the press asks me about the Soviet Union,” he said, “but the people ask me about the economy.”

The notion that a “new world order” should begin at home will be the main theme that Democrats press when Congress reconvenes.

One of the first issues that the House will debate is Bush’s refusal to release $5.3 billion in extended benefits approved by Congress for workers left unemployed by the recession.

First up on the Senate calendar is an appropriations bill for the Labor and Health and Human Services departments that would block the Administration from enforcing its ban on federal funding of health clinics that offer abortion counseling.

Other issues on which Democrats and Republicans are set to clash:

CIVIL RIGHTS: Danforth is expected to make another attempt in the Senate to bridge bitter differences between Congress and the Administration over the civil rights bill that Bush vetoed last year. This summer, the House passed another version of the bill, which would reverse recent Supreme Court decisions that make it harder for workers to sue their employers on discrimination grounds. However, the 273-158 vote was not enough to override another veto. Danforth’s chances of negotiating a compromise will look better if the Senate approves U.S. appellate Judge Clarence Thomas to succeed retiring Supreme Court Justice Thurgood Marshall. Although he is black, Thomas is against affirmative action and is opposed by some civil rights groups. Danforth is his Senate champion, and the Missouri senator’s support could make it harder for Bush to reject a civil rights deal. Thomas’ confirmation hearings begin Sept. 10.

GATES NOMINATION: Bush’s choice of Deputy National Security Adviser Robert M. Gates as CIA director is another controversial nomination because of suspicions that he may have played a role in the cover-up of the Iran-Contra scandal during the Ronald Reagan Administration. After a lengthy delay, the Senate Intelligence Committee is set to begin hearings on the nomination Sept. 16. Gates’ supporters believe that his confirmation chances have been improved by his expertise in Soviet affairs and his frequent warnings that Soviet President Mikhail S. Gorbachev could be ousted by a right-wing coup. “Bob Gates was right, at least about that part,” one Republican committee member said. But other members believe that this advantage was largely negated by the coup’s quick collapse and say that the focus of the hearings will remain on Iran-Contra, where Gates could be vulnerable. In what could turn out to be another major scandal related to Iran, both the House and the Senate are scheduled to begin investigations this month into allegations that Reagan campaign officials sought to delay the release of U.S. hostages held in Tehran until after the November, 1980, elections.

ETHICS: The Senate Ethics Committee has already given a mild rebuke to four members for intervening with federal regulators on behalf of failed Lincoln Savings & Loan owner Charles H. Keating Jr. However, partisan splits reportedly have delayed even stronger action against a fifth senator, Democrat Alan Cranston of California. Committee member Jesse Helms (R-N.C.) last month leaked a committee report critical of Cranston. Helms’ move heightened partisan tensions but also put pressure on the committee to act against Cranston.

DEFENSE: House-Senate conferees will take up the future of the Strategic Defense Initiative and the controversial B-2 bomber when they meet this fall to reconcile their respective versions of the new defense authorization bill. Despite the lessening of the Soviet threat, the Administration argues that some form of a “Star Wars” defense is still necessary against the kinds of short-range missiles that Iraq fired during the Persian Gulf War. Citing the role of the smaller F-117 Stealth fighter-bomber in that conflict, it says also that the B-2 Stealth bomber could be effective in conventional wars. The Senate approved $4.6 billion for SDI and $3.2 billion to continue the B-2 production.

Major Bills Before Congress

Here are some of the major bills in the hopper as members of Congress return from their summer recess:

* BANKING REFORM: Bills to reform the banking industry are pending in both the House and Senate. Both bills contain major regulatory changes, but provisions allowing banks to affiliate with securities firms are likely to cause controversy. The Senate may take up its bill this month. The Energy and Commerce Committee will consider the bill in the House.

* CRIME: Both the House and Senate crime bills would expand the death penalty, limit Death Row appeals and tighten controls on gun ownership. Passed by the Senate; awaiting approval by the House Judiciary Committee.

* DEFENSE: House-passed version of the defense authorization bill would block further production of the B-2 Stealth bomber and sharply curb funding for the Strategic Defense Initiative. The Senate-passed bill would continue SDI and authorize four more B-2s. Both bills permit women to fly as combat pilots. House and Senate conferees must reconcile differences.

* ENERGY: Omnibus energy legislation would open Alaska’s Arctic Wildlife Refuge to oil drilling. Related legislation would impose tighter fuel-efficiency standards on cars. Floor action expected in the Senate this fall. Several House committees are working on related legislation.

* TRANSPORTATION: Federal highway and mass transit programs expire on Sept. 30, requiring Congress to pass reauthorizing legislation. The Senate has approved a $123-billion, five-year measure. A House bill has foundered over a 5-cent gasoline tax but is expected to be returned to the floor this month minus the controversial tax provision.