Compromise Pacifies Angry Russian Cabinet : Politics: Ministers say agreement with lawmakers will allow nation’s economic reforms to continue.

Resolving the dramatic three-day crisis that had brought the Russian government to the brink of collapse, the national Parliament passed a compromise measure Tuesday that ministers said will leave them willing and able to continue their reforms.

All but withdrawing the resignation his Cabinet had rendered on Monday, Deputy Prime Minister Yegor T. Gaidar announced, “On the whole, this document would allow the executive branch to carry out further reforms.”

The entire reform program that President Boris N. Yeltsin’s Cabinet began to introduce this winter--and sold to the West as a solid enough basis for billions of dollars in aid--came under doubt over the weekend when the Parliament insisted on moves to water down Yeltsin’s tough financial policies.

Furious at lawmakers’ interference in their work, the Cabinet of mainly young, Western-minded economists submitted their resignation to Yeltsin and stormed out of the Congress of People’s Deputies, the national Parliament, on Monday.

But on Tuesday, after daylong discussions, the Cabinet and Parliament leaders managed to reach a cagey compromise that hinged on the provision that lawmakers could demand whatever they want for their long-suffering voters, but the government would spend only what it could afford.

The compromise also allowed Yeltsin to retain his special powers to rule by decree through this December rather than revoking them within three months, and allowed him to hold on--for now--to his post as prime minister.

The potential remained for critical fights on the Parliament floor because legislators had not yet given final approval to the document, but Privatization Minister Anatoly Chubais exulted: “The Congress has finally shown its position clearly: It has said it is pro-reform and pro-government.”

Lawmakers voted 530 to 236 to give initial approval to the compromise after Gaidar made a brief, powerful speech that left some deputies marveling at how the 36-year-old economist, formerly known as an ivory tower academic, has grown as a politician.

“We in the government are not capricious boys and girls,” Gaidar said in a sideswipe at the Parliament speaker who had hinted as much on Monday.

“We don’t lean toward caprices. We want to work. And to work, we don’t need much--that you untie our hands, give us the possibility to do normal economic work and to have the opportunity not to lie to you,” he said.

Yeltsin advisers said they believe that the Congress, with its strong contingent of hard-liners, had backed down because it was frightened by the thought of the months of disorganization that would come if a whole new Cabinet had to be formed.

But Chubais said he believes that the compromise is also a sign that both the “young government” and the Congress are learning lessons in democracy.

“With its decision Saturday, the Congress wanted to receive more than it is possible to receive in principle. By today’s decision, it has set real limits for its aspirations,” he said.

Gaidar noted that the Congress simply has to learn that it needs a special mechanism for working out budgetary issues so that it does not “take decisions costing hundreds of millions of rubles with a wave of the hand.”

Uncharacteristically, Yeltsin stayed out of the dispute--or at least, he was nowhere to be seen during the raucous floor arguments and negotiating sessions from Saturday through Tuesday. Ministers, however, said that he was extremely active behind the scenes and that he might speak today.

“In theater,” commented deputy Leonid Gurevich, “only a great actor can maintain a pause. It’s as hard to hold a pause in politics, and Yeltsin triumphs because of his great pause ability.”

The Cabinet had yet to physically withdraw the resignation it handed Yeltsin on Monday morning, but ministers indicated that they will formally announce their change of heart today.

“I believe the adoption of this document closes the issue of the government’s resignation,” Chubais said, and top Yeltsin adviser Gennady E. Burbulis said the Congress’ measure “eliminates the need for our resignation.”

The compromise did not, however, allay fears that the Cabinet, as it pursues its painful economic reforms, could turn the government upside down with threats of resignation and ultimatums every time it clashes with the Congress.

“Unfortunately, the government doesn’t have many tools with which to influence deputies’ assessments of events,” Chubais said. “Out of this limited arsenal we selected what we considered to be most applicable to the situation.”

The immediate threat of further political clashes has not passed completely either.

Opposition lawmakers planned a counterattack today, with deputy Mikhail Astafyev declaring from the floor after the compromise was proposed: “This is an absolute outrage!”

And just off Red Square, an unusually large gathering of several hundred conservative, pro-Communist demonstrators chanted anti-government slogans in the light spring rain.

At the Congress, conservative deputies proposed a resolution denouncing attempts by Western countries to make their aid conditional on “changes in the personnel policy of the Russian government or various political decisions,” and they accused the West of trying to “dictate from abroad.”

Western politicians had openly expressed their worry that if the Cabinet went through with its resignation, the reforms aimed at forcing the socialist Russian economy toward a market-driven system would founder. Gaidar had warned that the West could simply renege on its promise of billions more in credits.

More battles appeared to be shaping up over one of the more slippery clauses of the compromise measure, which gave the Cabinet and legislature until May 20 to work out a “stage-by-stage” implementation of the changes in economic policy the Congress has demanded.

The Cabinet has agreed to lower some taxes, increase subsidies to strapped farms and industries and raise wages to some extent.

But since Gaidar’s economists object categorically to many of the Congress’ demands, which include indexing savings accounts to inflation and paying government employees as highly as industrial workers, it appeared in some ways that the compromise acted simply to postpone unpleasant disputes.

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