Democrats Approve Campaign Reforms : Congress: Measure would limit spending and create public financing. But the legislation is unlikely to become law.

House and Senate Democrats, hoping to restore public confidence in Congress, set aside their differences over campaign finance reform Friday and agreed to legislation that would sharply limit election spending and tighten regulations governing campaign contributions.

The reforms, approved by House and Senate negotiators over Republican protests, would create a public financing system for congressional campaigns loosely modeled after that already in use for presidential elections.

It also would limit the amount of money political action committees could contribute to campaigns and ban the use of so-called “soft money” in federal election campaigns.

Although certain to be approved by the House and the Senate later this month, the bill’s provisions would go into effect in 1993 only if the next Congress passes legislation to finance the reforms--a still contentious issue left unaddressed by the negotiators.

However, the bill is not expected to get that far unless President Bush reconsiders his threat to veto it because of his opposition to public financing of congressional campaigns and limits on election spending.

Thus, the likelihood that the legislation will be enacted remains slim and the real importance of Friday’s agreement appears to be mostly political.

By passing the package, the Democrats can counter Bush’s election-year charge that Congress is unwilling to clean its house or reform the political process by pointing to his veto as evidence that he is protecting the very system he claims to want to change.

“Just as the President obstructed and opposed our efforts to provide middle-income tax relief, he now threatens to obstruct the most fundamental political reform legislation of this generation,” said House Speaker Thomas S. Foley (D-Wash.).

“The President doesn’t want campaign finance reform,” added Senate Majority Leader George J. Mitchell (D-Me.), citing figures compiled by Public Citizen, a public interest group, that show Bush has received more public funding for his election campaigns than any other politician in U.S. history. “It takes gall for somebody with a record like that to criticize others on the subject,” Mitchell added.

The bill prepared by the Democrats would impose spending ceilings of $600,000 to $750,000 on candidates for House seats and $1.6 million to $8.9 million for Senate races, depending on the size of the voting population in each state.

Candidates who complied with the limits would be eligible to receive 33% of their funds from public financing in House races and 20% in Senate contests. The amounts that political action committees could contribute would be cut in half and the use of “soft money”--money spent by state parties for activities that benefit candidates in federal elections--would be banned.

In 1988, Bush and Democratic challenger Michael S. Dukakis both benefited from the soft-money loophole, which allowed money raised in excess of federal contribution limits to be used indirectly to support their campaigns.

Democratic Party officials outside Congress had vigorously resisted the soft-money ban. But in the “current climate” of voter outrage over the House bank scandal and other congressional perquisites, House negotiators dropped their opposition to the ban by accepting the Senate version, one Democratic aide said.