Budget-Busting Bill Gets Renewed OK in Russia : Politics: Lawmakers ignore Yeltsin’s request to hold the line on spending. But they do rescind limits on foreigners’ religious activities.

President Boris N. Yeltsin tasted both victory and defeat in Russia’s Parliament on Friday when legislators lifted controversial limits on religious activity by foreigners but approved budget-busting spending levels that endanger further Western aid.

Rejecting Yeltsin’s request to hold the line on subsidies to loss-leading state industries and other government outlays, the Supreme Soviet voted to reaffirm its 1993 state budget providing for a deficit equal to 25% of Russia’s gross national product.

The lawmakers’ action flew in the face of advice from foreign economic experts and could have momentous consequences for Russia’s economy; the World Bank and the International Monetary Fund recommend a deficit of no more than 10% of GNP.

Foreign donors and lenders may elect not to provide more financial assistance if that ceiling is exceeded. Deputy Prime Minister Alexander N. Shokhin told reporters that the second half of a $3-billion IMF loan aimed at stabilizing Russia’s economy, initially scheduled for September, has been held up as the parties renegotiate.

Russian lawmakers originally passed this year’s budget only in July, when Yeltsin was vacationing at his dacha away from Moscow. Under his presidential prerogatives, Yeltsin sent the bill back to Parliament, warning that the yawning deficit would undercut the already anemic ruble.

The deputies had voted to spend two rubles for every one the government takes in. Yeltsin proposed reducing the share unsupported by revenue to 30.2%.

“The people will not forgive us if we approve this budget,” Finance Minister Boris G. Fyodorov, who pleaded the president’s case, bluntly told the conservative-led Parliament Friday.

Because of inflation, Fyodorov said, the deficit that would be generated by the Supreme Soviet’s budget has already ballooned to 26 trillion rubles, or about $26 billion.

“As a result, we will have complete collapse of the financial system of the country and hyper-inflation will become a reality,” Fyodorov said.

He reminded lawmakers, most of whom were once Communist Party officials, that “even Lenin once said that inflation is a tax levied on every man.”

Despite his protests, deputies voted 151 to 3 for a budget denounced by Fyodorov as a grandstanding populist ploy.

Fyodorov didn’t show up in the hall in the afternoon to answer deputies’ questions, and the incensed lawmakers voted 147 to 10 to demand that Yeltsin dismiss him.

What happens next is murky, as is almost everything in Russian politics these days. Under the constitution, Yeltsin is supposed to sign the budget into law within 14 days or appeal to the Constitutional Court. To try to force the president to obey Parliament, its chairman, Ruslan I. Khasbulatov, scheduled debate on a bill next Friday that would make it a crime not to follow laws voted by the Supreme Soviet or rulings by the court.

The government, however, evidently has contingency plans. Fyodorov said he and other ministers have agreed on a “legislative initiative” to be made next week that will void 7 trillion rubles ($7 billion) worth of spending ordered by Yeltsin and Prime Minister Viktor S. Chernomyrdin.

Before tackling the budget Friday, Russia’s lawmakers heeded Yeltsin for once and rolled back most of the limitations they had earlier voted to slap on religious activities by foreigners.

The ban on preaching and convert-seeking by unlicensed outsiders that passed on July 14 had alarmed religious organizations ranging from Jehovah’s Witnesses to the Roman Catholic Church. Leaders of the Russian Orthodox Church, who claim more than 60 million faithful but fear inroads into their flock by media-savvy Western evangelists like Billy Graham and Jimmy Swaggert--or the Roman Catholic Church--favored the new law.

Yeltsin, however, refused to sign it and sent it back to the Supreme Soviet, objecting that it violated Russia’s constitution and the country’s international legal commitments.