The Senate Finance Committee yesterday approved controversial legislation that would raise sugar prices far higher than President Carter wants, and added, as veto insurance, a critical amendment said to be needed to avert collapse of the current world trade talks.
By voice vote, the panel endorsed a bill that would establish a new market price for sugar of 17 cents a pound - a penny a pound higher than provisions in a House bill scheduled for a floor vote today and 2 cents more than the White House says will accept.
To prod Carter into signing the sugar bill, the panel tacked on a provision extending his authority to waive otherwise mandatory penalties on cut-rate European exports-legislation his aides say is necessary to prevent the trade talks from blowing up.
If the Finance Committee version passes intact, it could put Carter in a box: unless the president signed the sugar bill, he could risk jeopardizing a new world trade agreement> which the United States has been seeking, on and off, since 1973. With time running out in this Congress, there may be no other vehicle to which the trade legislation can be attached.
The administration has argued that a 17-cent-a-pound market price for sugar would be extremely inflationary. Howard W. Hjort, the Agriculture Department's chief economist, warned that the Finance Committee bill could cost consumers $4.7 billion over five years.
The United States already has signed a new international sugar agreement calling for a world market price of 11 to 21 cents a pound. Sugar prices in the United States running at about 13 cents a pound-9.5 cents in base prices plus 3.5 cents in duties and costs.
However, Senate approval of the treaty has been blocked in the Foreign Relations Committee, where Sen. Frank Church (D-Idaho) has insisted that the administration establish a domestic sugar price program first. Church is allied with beer-growing interests.
It was not immediately clear how yesterday's action by the Finance Committee would affect the House vote today. House members are scheduled to choose between two rival plans setting prices at 16 cents and 15 cents a pound, respectively.
However, despite the committee's maneuver in tacking on the trade provision, there was increased spectulation yesterday that the panel's action may prevent any agreement in a House-Senate conference committee, effectively killing prospects for any legislation.
Hjort told reporters after the session that " it looks more and more like no legislation," and sugar industry sources also expressed pessimism about the outlook for passage of any bill. The Senate is not expected to take up the legislation until next week.
The provision involving the trade talks was added by Sen. Abraham A. Ribicoff (D-Conn.), chairman of the panel's trade subcommittee. The administration has been seeking an extension of its current trade authority, although not as part of the sugar bill.
The provision essentially would extend Carter's authority to waive imposition of countervailing duties, or penalities, on Common Market agricultural exports> despite evidence that they are being "dumped" at subsidized prices below those charged at home.
Without this extention, the authority would expire on Jan. 3, forcing Carter to begin assissing duties. The move would come just as the trade talks are winding up, however, and Carter aides say they fear any new penalties could spark European retaliation, and sidetrack the talks.
However, under the committee's legislation, the waiver authority would be extended only if Carter can report to Congress next Jan. 3 that the trade talks essentially are completed, and that any new agreement adequately protect U.S. export interests.
The bill would extend the waiver authority until Sept. 1, 1979.
The 17-cent-a-pound price establish would provide for automatic adjustment.
The rationale behind objections by the administration is that the bill would hold down imported sugar, through fees and other devices, and encourage more expensive domestic production, leading to sharply higher prices for consumers here.
The bills scheduled to come up in the House today would vary in their handling of imports. The version sponsored by the House Agriculture Committee would call for imposition of quotas to hold import levels down, while a rival Ways and Means Committee plan would mandate fees.