House-Senate negotiators gave in to President Reagan last night by dropping a jobs-creation program but defied him by cutting MX missile production funds as they crafted what they hoped would be a veto-proof stopgap spending package to resume the flow of money to most government departments and agencies.
They also agreed to a 10- to 15-percent increase in the pay cap for nearly 33,000 senior federal executives as part of a compromise on congressional pay that would raise House members' salaries and let senators earn unlimited amounts of outside income.
Congress will not finish action on the emergency measure until late today at the earliest. This means a partial shutdown of the government until final agreement can be reached and funding is restored, although all workers are to report for duty this morning.
The conference agreement is to go to the House and Senate for final approval today, then to the White House.
White House spokesman Peter Roussel said last night that Reagan will "wait and see what comes to him" before deciding whether to accept a bill without jobs money or MX production funds.
Roussel said it is an "unanswered question" whether Reagan will sign the so-called "continuing resolution" without MX production money for the current fiscal year. "He'll just have to read the fine print" when the legislation reaches the White House, Roussel said.
Bowing to Reagan's threats to veto the spending measure if it included jobs-creation money approved by both houses -- $5.4 billion by the House and $1.2 billion by the Senate -- the conferees struck out all spending for public works and other employment programs.
But, responding to his hints that he might accept what White House aides called "humanitarian" assistance, they included $100 million for fuel assistance for low-income families and $25 million to help victims of plant shutdowns.
"It's just a case of recognizing the obvious," House Appropriations Committee Chairman Jamie L. Whitten (D-Miss.) said. "This was not the bill for jobs," Senate Majority Whip Ted Stevens (R-Alaska) said.
"It may be a victory for the president, but I think it's a defeat for the unemployed people in the country," Sen. Dennis DeConcini (D-Ariz.) said.
Senate Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) said he felt like "an orphan" because he supported the jobs programs even as he sensed "diminishing interest" by House Democrats. Hatfield said he would continue to push for jobs spending in the fiscal 1984 budget to be taken up by the 98th Congress early next year.
Conferees, at the insistence of House members led by Rep. Joseph P. Addabbo (D-N.Y.), chairman of the Appropriations subcommittee on defense, rejected $988 million in MX production funds.
They kept the missile program alive by approving $2.5 billion for research and development but froze expenditure of most of the money until Congress approves a basing system.. Congress would have 45 days, starting March 1, to approve or disapprove whatever basing plan the administration submits.
Congressional opposition to the MX stemmed largely from widespread skepticism about Reagan's choice of the "Dense Pack" plan for deploying 100 MX missiles, each with 10 nuclear warheads, in a closely spaced formation near Warren Air Force Base outside Cheyenne, Wyo.
Conferees left $250 million available to be used for testing various basing plans and the missile itself until its first flight. The test missiles could be deployed after Congress approves a basing mode.
Conferees also went along with the House in dropping $498 million in procurement funds for the Pershing II missile, scheduled for deployment in Western Europe beginning next December. They kept $30 million to train Pershing crews.
Referring to the MX decision, Stevens said, "It's not what the administration wants, but it's as good or better than what they might have expected from the House position." Said Rep. Jack Edwards (Ala.), ranking Republican on the Appropriations subcommittee on defense: "I hope the administration will understand what we've had to do."
The conferees also agreed to extend the proposed new spending authority through Sept. 30, meaning the appropriations would last throughout the current fiscal year.
There was also considerable speculation among congressional leaders that rejection of the jobs spending would add pressure on the Senate to pass a jobs-creating increase in the gasoline tax awaiting final action. "It will place great pressure on those who would delay the gas tax," Stevens said.
In other action, as conferees completed work on the bill after the Senate broke free of a filibuster and formally adopted its version of the measure:
The House prevailed over the Senate on military aid to Israel, resulting in a cut of $375 million in loans and credits from the level approved by the Senate over administration objections.
Restrictions on the Federal Trade Commission's power to regulate doctors, lawyers and other state-licensed professionals were dropped, in a major defeat for the American Medical Association, which had lobbied heavily for the curbs with campaign contributions to lawmakers.
Rejected was a Senate-approved compromise from Sen. Warren Rudman (R-N.H.), who complained, "My language would only have allowed the FTC to go after such things as kickbacks, boycotts and price-fixing, but the AMA was just too bullheaded and didn't see things that way."
Compensation for Reagan's appointees to the Legal Services Corp. was limited to expenses and payments for attending board meetings. The action followed disclosure last week of more than $25,000 in consulting fees charged by one board member and a series of fringe benefits, including membership in a private club, for the corporation president.
A House-approved ban on further spending for the Clinch River breeder reactor was rejected in favor of a spending cutback from $200 million to $181 million. Funds for construction would be withheld for the duration of the stopgap spending measure.
The action came despite objections from Sen. Dale Bumpers (D-Ark.), who complained, "This is money right down the tubes. It is a technological turkey."
Previously approved restrictions on use of federal workers' health benefits for abortions were dropped. The House had wanted the restrictions; the Senate had not.
The situation is similar to last year at this time, when Reagan and Congress deadlocked over spending in a previous continuing resolution, disrupting government activity for a day.
The pay raise, first for high-level government executives since 1979, was approved as part of a carefully crafted compromise under which House members' salaries would be raised by 15 percent and senators would forgo a pay raise in exchange for no limit on the amount of money they can earn from speechmaking and other outside activities.
The pay-raise compromise sets up an unusual but not unprecedented dual pay system for members of the House and Senate.
Senators would continue to receive $60,662.50 annually, as members of both houses now receive, while House members' pay would be raised to $69,800 annually.
As part of the deal, the House dropped its proposal to limit outside earned income to 30 percent of a lawmaker's salary, which would in effect have reimposed a limit on senators' outside income that the Senate has just repealed. There is no limit currently, but one would have taken effect in January without the Senate action earlier this month repealing it.
Federal executives, whose pay is tied to that of Congress, have not received a pay raise in four of the last five years because Congress has been afraid to raise its own pay, citing possible negative voter reaction.
However, it was generally believed that a lame-duck session, laden with members who are retiring and others who do not have to face the voters again for at least two years, is the safest time to approve a congressional pay raise.
The reason for the tradeoff between House and Senate is that senators care more about outside income because they tend to earn more on the outside from speeches and other activities, as they are better known than House members.
"The Senate is actually getting much more of an increase than the House does," Whitten observed in the conference. Whitten had proposed that any senator who would rather take the pay increase be allowed to do so. Senators quickly shouted that down.
In a voice vote on the plan, only Whitten and a handful of House conferees were heard voting against it.
The pay raise will not become law until both chambers pass the conference agreement on the continuing resolution and Reagan signs it. However, the administration has voiced no opposition to the pay raises, although there is no guarantee, especially if the House has to vote again on its own pay raise, that they would survive in a post-veto compromise.
The continuing resolution is required because existing spending authority, approved in earlier continuing resolution, expired at 12:01 a.m. Saturday. It covers only the departments and agencies for which Congress has yet to pass regular appropriations bills for the fiscal year that started Oct. 1. Among these are some of the biggest agencies, including the Pentagon and the departments of Labor and Health and Human Services.
Including an Interior Department money bill approved yesterday, Congress had completed seven of 13 regular appropriations bills as of early last evening. Reagan had signed five of them, including transportation and agriculture money bills passed during the lame-duck session.
During the conference, legislators were restless and at times sarcastically bitter about spending a Sunday afternoon at work in a crowded, increasingly smoke-filled room off the Senate floor. Dozens of lobbyists, reporters and congressional staff members hovered in hallways outside.
At one point, amid suggestions that a controversial issue be put off until today because a concerned conferee was not present, Sen. Alfonse M. D'Amato (R-N.Y.) complained, "We could be here and singing 'Jingle Bells' pretty soon; we may even be singing 'Auld Lang Syne.' "