U.S. Now Focusing on Aid to Soviets : Policy: Opposition to long-term economic assistance has faded, and the question now is what and how.

The Bush Administration’s remaining key opponents to long-term economic aid for the Soviet Union have given way in the face of intense pressure from Soviet leaders and are focusing on what help should be given and how to deliver it, senior officials said Friday.

Such long-term assistance--mainly sharply increased technical assistance--would come in addition to U.S. shipments of food and other humanitarian aid to help the Soviet people this winter.

Senior officials said Friday that the Administration has undergone a reassessment of its earlier policy of opposing any long-term aid until the Soviets create a free-market economy.

“There has been an intellectual shift within the Administration,” said one White House official who asked not to be named. Another senior Administration official observed: “I think, obviously, the conditions have changed . . . and there is a resolve to do more.”

Recent visits to the post-coup Soviet Union by senior U.S. officials--including trips by such fierce opponents of long-term aid as Treasury Secretary Nicholas F. Brady--have led to a growing belief in the Administration that America has no choice but to play a bigger role in supporting the move by the Soviet central government and the country’s republics to democratic and economic reform.

Soviet leaders have also stepped up their public pressure on the United States to help, warning visiting American officials of the threat of widespread famine and economic chaos unless the West acts more aggressively. One U.S. official confirmed Friday that the Soviets are asking for “heavy involvement by the United States” in a coordinated Western economic aid effort.

Officials traveling in the Soviet Union on Friday with Brady and Federal Reserve Board Chairman Alan Greenspan made it clear that their meetings with Soviet leaders had left a deep impression. “This is a very important time in world history,” said one senior U.S. official traveling with Brady. “If America isn’t there, it is a default in human character.”

Now, senior Administration officials say Washington is willing to provide long-term aid if the Soviets develop and adopt a workable plan--endorsed by the World Bank and the International Monetary Fund--for an eventual move toward a market economy.

The new consensus in the Administration comes after Secretary of State James A. Baker III signaled an initial shift in Washington’s thinking on aid last weekend during his latest Soviet tour. Baker and his aides then said they were beginning to work on proposals for an expanded multinational aid program that could be comparable in scope--but not in cost--to the Marshall Plan that helped redevelop Europe after World War II.

But other senior officials, most notably Brady, continued to strongly object to long-term aid until the week’s end; some suggested Baker had been “slightly out front” on the issue.

That changed by Friday. The Soviet revolution is “obviously such a momentous event that it shouldn’t be a surprise that everyone, including the U.S. government, has got to rethink their previous positions and what it all means,” said a senior Administration official.

The official added that the initial reluctance to provide long-term aid was based largely on the fact that, until the failure of the August coup, many Soviets were still refusing even to accept the premise that their country needed to switch to a free-market economy.

During their negotiations on financial assistance at the London Economic Summit in July, for example, Administration officials often dealt with hard-liners who rejected the idea of a Western-style market system. But now, those conservatives have been ousted, and U.S. officials have found a changed atmosphere in Moscow and in the republics.

Before it acts, the Administration wants to coordinate its aid strategy with the other major industrialized nations. Treasury Undersecretary David Mulford plans to meet with officials of the so-called Group of Seven nations this weekend to discuss Soviet aid.

Still, senior officials stressed Friday that they still have no plans to send large, direct cash grants to the Soviets. They also don’t plan to match the new Soviet request for $14.7 billion in food aid; U.S. food assistance will be on a much smaller scale, officials said.

“We are not going to give them a check for $50 billion or anything,” a senior Administration official said.

But officials acknowledged that, besides emergency food aid for the coming winter, they are now committed to a huge increase in U.S. technical assistance, programs designed to make available U.S. expertise in food distribution, energy production and the conversion of defense factories to producing consumer products.

More important, officials in the White House, State Department, and Treasury are trying to come to grips with a strategy on what they should do after technical assistance is in place and the Soviets have finally adopted the framework of a market economy. “The big question is what do you do beyond technical expertise, if they call our bluff and actually adopt a market economy?” asked one official.

Yet, while the Administration has softened its position, senior officials are still deeply concerned about the huge obstacles to delivering Western help. They argue that foreign aid must still wait at least until the Soviets finally work out the political and economic relationships between their central government and the republics. The United States also believes that the Soviets themselves now have little understanding of the condition of their economy, making it increasingly difficult to know what kind of foreign aid would be most helpful.