Votes Set on Spending Cuts to Offset Quake Aid : Congress: House action complicates efforts to quickly pass $8.6-billion package. Three funding proposals offered.

Complicating efforts to quickly pass an $8.6-billion earthquake assistance package, the House Democratic leadership reluctantly took steps late Wednesday virtually assuring that at least some of the aid will be offset by spending cuts in other federal programs.

In the process, House leaders set up a showdown on the floor today over three different proposals to pay for some or all of the emergency funds for Southern California by trimming transportation, community development, defense and other programs nationwide.

The Clinton Administration, which sent the relief proposal to Congress, supports following the previous practice of waiving pay-as-you-go budget rules to add disaster costs to the federal deficit. House Democratic leaders also have sought to defeat initiatives backed by most Republicans and some Democratic hawks on the deficit to balance the aid with spending reductions.

“It endangers the bill dramatically because a large number of members will refuse to go along with the unprecedented notion that we cut programs in their districts to help us,” said Rep. Howard L. Berman (D-Panorama City), whose San Fernando Valley district was hit hard by the Northridge quake last month. “We have a lot of work to do.”

By contrast, some Republicans, including Rep. David Dreier of San Dimas, maintained that inclusion of a spending reduction provision will enhance the bill’s prospects by attracting more GOP backing even if it makes the measure unacceptable to some Democrats. Advocates of the offset proposals say they support earthquake aid but some vow to vote against it without spending cuts.

The eleventh-hour maneuvering Wednesday took place in the House Rules Committee as it determined the scope of debate on the assistance bill that would be permitted on the floor. Rep. John T. Myers (R-Ind.) offered an amendment specifying $7.5 billion in spending cuts; a coalition of Reps. Jim Nussle (R-Iowa), John R. Kasich (R-Ohio), Timothy J. Penny (D-Minn.) and Californian Gary A. Condit (D-Ceres) proposed a competing amendment to reduce spending by $9.7 billion.

The bipartisan group increased its figure from $7.1 billion this week after the Administration boosted the size of its emergency aid proposal, which also contains nearly $1.2 billion in funds for military peacekeeping missions and nearly $750 million largely for additional costs of last year’s Midwestern floods and the 1989 Loma Prieta earthquake.

Speaker Tom Foley (D-Wash.) said earlier Wednesday that he expected the Rules Committee to permit a single offset amendment to be taken up on the House floor but predicted it that would be defeated. Many members expected it to be the larger bipartisan amendment.

But when Democratic strategists huddled late Wednesday afternoon, they were uncertain that they had enough votes to defeat that proposal.

Therefore, Rep. Vic Fazio (D-West Sacramento), a leader in the House, offered a third proposal to trim spending by a more modest $2.5 billion. Fazio said he is including a set of cuts that the Clinton Administration had supported last year.

In a complex parliamentary maneuver called “king of the hill,” the Rules Committee agreed to allow consideration of Myers’ amendment to cut $7.5 billion, the bipartisan amendment to cut $9.7 billion and Fazio’s Democratic-backed amendment to cut $2.5 billion--in that order. If more than one of the measures pass, the last one to do so would take effect and negate the others.

This little-used tactic is considered a last-ditch tool for escaping a tough spot. In an election year, it would allow deficit-conscious lawmakers to vote for all three budget-cutting amendments--and thereby achieve the Democratic leadership’s goal of minimizing the size of the reductions.

House Democratic Whip David E. Bonior (D-Mich.), a member of the Rules Committee, said the approach was chosen to avoid any chance of delaying the badly needed relief funds for emergency housing, business and home loans and reconstruction of freeways, schools and other public facilities.

He asserted that the “petty politics” of those seeking to link the aid to deficit reduction is “pitting the people in California against people in the Midwest and the Northeast.”

Bonior said that the House leadership would attempt to defeat both of the first two amendments that impose larger cuts but that, failing to do so, it would push for the Fazio alternative.

Berman said that including offsets could drag out the legislative process by leading to prolonged negotiations to reconcile versions of the bill passed by the House and Senate. He said it might reduce the final aid figure because some lawmakers would try to scale back the assistance in an attempt to lessen the offsetting spending cuts.

Berman also criticized California Republicans, who he said have failed to stand up against imposing offsets for the first time.

He said Republicans should have been “leading the charge to ensure the prospects for passing the bill, not undermining the prospects of its passage.”

Dreier, a Rules Committee member who supports the offsets but has pledged to back the measure under any circumstances, disagreed.

“If I thought for a second that offsets would impose any delay in the process, I wouldn’t support them,” he said. “There is no doubt in my mind that we will overwhelmingly pass it.

Rep. Gerald B. Solomon of New York, the ranking Republican on the Rules Committee, predicted that the House would adopt either or both of two GOP-backed spending-cut amendments and would then defeat the proposal to nullify them with a smaller reduction.

In recent years, there have been increasing demands by deficit hawks for some method of financing the cost of disaster relief without adding to the massive deficit.

The earthquake aid bill also reflects another one of the most contentious political issues on Capitol Hill: illegal immigration. On Tuesday, the House Appropriations Committee agreed to a compromise amendment that would prohibit longer-term post-quake assistance, including housing, to those known to be illegal immigrants.