The White House yesterday threatened a veto of a big supplemental appropriations bill, and Republican congressional leaders warned that President Reagan risks losing $350 million for his Caribbean Basin initiative if he blocks the measure.
Later, Republicans predicted that a veto was even more likely after a House-Senate conference approved the roughly $14 billion measure with the Caribbean aid money but without much of the military aid the administration wanted, especially $75 million in foreign military sales loan guarantees.
"I hope this is one more reason for the president to veto this bill," said Sen. Robert W. Kasten Jr. (R-Wis.), chairman of the Senate Apprpriations subcommittee on foreign aid.
The latest veto showdown between Reagan and Congress began to take shape as House and Senate negotiators had some separate collisions of their own, mainly over whether to limit future cost-of-living increases in federal workers' pensions.
The Senate wants a 4 percent limit and the House wants to keep the present system of pegging the increases to the consumer price index, without any cap. Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) said the issue is so important that all the currently proposed $130 billion in deficit reductions over the next three years, including the administration-backed $98.9 billion tax increase, "may hang in the balance."
The fight over the supplemental money bill is not directly related to the controversy over budget cuts but underscores the tension that is gripping Congress as it heads toward some of the most important votes it will face before this fall's elections, all of them dealing with money.
Under pressure from the administration, the Senate included the Caribbean aid in the omnibus money bill, and House conferees went along last night, although they balked at the military sales funding and agreed to only $75 million of the $128 million that the Senate had allocated to El Salvador.
But if Reagan vetoes the overall measure, Congress may never get back to the Caribbean plan, several Republican leaders said they have told the White House.
Among them was House Minority Leader Robert H. Michel (R-Ill.), who said he also has doubts as to whether the House would sustain a veto of the bill. Rep. Silvio O. Conte (R-Mass.), ranking Republican on the House Appropriations Committee, predicted flatly that Reagan would lose the Caribbean aid money if he vetoed the measure.
However, Conte also argued on the administration's behalf at the conference, saying Reagan could not be expected to sign the measure without the military aid money.
What is irritating some members is that the White House has been pressuring Congress to add its own pet projects, such as funding for the Caribbean aid plan, while criticizing the lawmakers for including money for projects they want, especially social welfare programs.
It has been known for some time that Reagan is displeased with the spending measure, which includes about $2 billion less for defense and about $1 billion more for domestic programs than he wants. The spending Reagan opposes includes funds for jobs for elderly people, education for the handicapped and aid to needy college students.
But the White House added some bite to the veto rumbles yesterday when deputy press secretary Larry Speakes, in language reminiscent of a veto confrontation between Reagan and Congress over an earlier supplemental appropriations bill, said the president's aides are considering recommending a veto.
"This bill does not appear to meet our criteria and I would think the president's advisers would look very closely at it and perhaps recommend a veto," said Speakes. "What they members of Congress have done is slip back into this bill the things the president vetoed three times in the original bill," Speakes added. "It's not programs. It's the excess of the request."
As the conferees finished work on the spending bill, they approved a Senate resolution asserting American determination to contain Cuban aggression by force if necessary, with some House members dismissing it as meaningless rhetoric.
At a preliminary meeting on the federal pension issue, House Post Office and Civil Service Committee Chairman William D. Ford (D-Mich.) stated his strong opposition to what he called an "arbitrary cap" on inflation adjustments. But Sen. Ted Stevens (R-Alaska), chairman of the Senate's civil service subcommittee, said the Senate would not accept anything short of the full savings envisioned by the pension limit, adding up to about $5 billion through 1985.
As a compromise, he suggested a increase of 2 percentage points less than the CPI in computing the annual inflation adjustment, combined with a one-month delay in payment of the increase and elimination of the increase for "double-dipper" workers under age 62 who get both military and civilian government pensions. There was no immediate response from House negotiators.
In clearing up other points in dispute, the conferees agreed to drop a controversial Senate proposal that would have reduced pensions of government workers who were forced to retire early because of reductions-in-force. But all the big savings are wrapped up in the cost-of-living issue, and the negotiators will resume work on that this morning.