Spending Cuts OKd in Senate Compromise : Legislation: Bipartisan accord on $16-billion package breaks stalemate. Savings would help offset the costs of disaster relief in California.

Breaking more than a week of intense partisan stalemate on the eve of a two-week Easter recess, Senate leaders reached agreement Thursday on a $16-billion package of spending cuts to help pay for deficit reduction and offset the costs of disaster relief in California.

A day after a similar compromise was scuttled by liberal Democrats, party leaders emerged from marathon negotiations to announce that they had secured a second agreement that was expected to clear the way for passage of the package late Thursday night. Other legislation held up by the weeklong dispute also was expected to be passed before the session was adjourned as the Senate threw itself into a last-minute sprint to dispatch its backlogged agenda before the recess.

The eleventh-hour compromise, negotiated with White House approval by Senate Majority Leader Bob Dole (R-Kan.) and Minority Leader Tom Daschle (D-S.D.), would restore $835 million of the $1.3 billion that Democrats had sought to restore to anti-poverty programs that would suffer the biggest cuts under the GOP bill.

At the same time, at Republican insistence, an almost equal amount--$812 million--would be added to the more than $8 billion in deficit reduction contained in the new bill. The remaining cuts would be used to offset the Administration’s request for $275 million in debt forgiveness for Jordan and $6.7 billion in disaster aid for California.

More important for the exhausted leadership on both sides, this time senators from both parties were on board. “This agreement is locked . . . and will pass tonight,” said Daschle, who spent most of the day trying to quell a revolt within his own party to a similar agreement he negotiated with Dole late Wednesday night.

That agreement would have provided for slightly less money for deficit reduction and for the social programs that Democrats had sought to shield from GOP budget cutters. The additional funds for both were offset in the new agreement by steeper cuts in other areas, mostly from funds earmarked for federal administrative and travel costs.

While the agreement could still unravel when a conference committee tries to reconcile it with a $17.1-billion spending cut bill passed earlier by the House, the compromise broke a weeklong stalemate between Republicans pressing for greater deficit reduction and Democrats seeking to defend programs that they have long held sacred.

“It’s more than numbers. It’s policy. It’s principle. It’s a question of what you stand for,” said Sen. Frank R. Lautenberg (D-N.J.).

Besides the spending cuts, legislation that the Senate must approve before the recess included a $3.1-billion defense bill to reimburse the Pentagon for the costs of its peacekeeping operations in Haiti and Somalia and a measure that would establish a control board to oversee the District of Columbia’s nearly bankrupt finances. Both measures have already been passed by the House.

Daschle said that the White House, which has threatened to veto the larger House version of the bill, would accept the compromise he negotiated with Dole provided that the new balance of cuts is not disturbed in conference with the House.

But many of his fellow Democrats balked at the first compromise attempt when they saw it Thursday morning. The setback was an embarrassment to both leaders--to Daschle, who spent the day trying to quell the rebellion within his party’s ranks by liberal senators, and to Dole, whose presidential ambitions could suffer by the appearance of a Senate in gridlock.

Republicans want to pass the bill before the recess so they can go home to their districts and claim credit for lowering the deficit and setting the stage for a far more ambitious round of spending cuts later in the year.

President Clinton, for his part, wants to dispatch disaster relief money to California, a state that will be crucial to his reelection bid next year.