A tentative agreement between the Reagan administration and Farm Belt senators to provide emergency credit relief for farmers fizzled last night when Senate Democrats refused to go along with it.
Sen. Majority Leader Robert J. Dole (R-Kan.) said late last night he had little hope of working out a deal with the Democrats. But, he said, Senate Republicans had decided to ask Agriculture Secretary John R. Block to implement yesterday's agreement administratively.
This would begin providing relief to farmers while leaving the Democrats "out there naked," Dole said.
The impasse meant a continuation of the Democratic-led filibuster that has held up the confirmation vote on Attorney General-designate Edwin Meese III for two days.
Senate Democrats said the credit relief program was inadequate and they objected to a letter from Block spelling out the administration's position. They called the letter "insulting," "bush league" and "provocative."
At the same time, President Reagan, in his news conference last night, expressed sympathy for farmers, but stuck to the administration's earlier offer of $650 million in loans and loan guarantees. House Democrats are pushing a plan for an additional $1 billion.
Dole said, "Every day that we waste here is another day the farmers aren't going to get relief or the bankers . . . ." He added that "the question is whether we want to get some relief or whether we want to get into a partisan wrangle on the first issue of the year."
Dole acknowledged that he did not have enough votes to end the filibuster on Meese's confirmation. But he said he would keep the Senate in session through the weekend, if necessary, to end the action holding up the nomination. But Sen. Joseph R. Biden Jr. (D-Del.) said of the filibuster organizers: "They're ready to go to the wall. There's absolute unanimity that they're not going to yield the filibuster absent many more concessions from the administration."
Yesterday's short-lived accord was hammered out in 24 hours of behind-the-scenes negotiations between farm-state senators of both parties and Secretary Block, with the Senate Republican leadership acting as mediators.
It included written assurances, to be followed by approval of a nonbinding "sense of the Senate" resolution, that the administration will provide adequate funding for direct and guaranteed farm loans and ease the terms under which farmers can get loan guarantees.
It was aimed largely at encouraging banks, through expanded loan guarantees and other provisions, to participate in existing credit-aid programs.
Senate Democrats objected to Block's assertion in the letter that the administration would "oppose any additional legislation because it is unnecessary and would harm farmers by delaying implementation of our programs."
They complained that the letter should have come from Reagan rather than Block and protested that it failed to recognize the bipartisan nature of the agreement, saying it implied instead that the administration alone was responsible for liberalizing farm credit.
In addition to yesterday's assurances, many of the Democrats said they want congressional action on more far-reaching legislation, such as a bill approved yesterday by the House Agriculture Committee that, among other things, would advance payment of farm price-support loans.
Under the House bill, farmers would be able to get half the loan money, usually given out after the fall harvest, in time for this spring's planting.
The House farm credit bill, which is expected to reach the floor next Wednesday, is estimated by Agriculture Department officials to cost between $1.6 billion and $9 billion over the next two years, depending on whether farmers can repay the loans.
Dole said the House bill would not pass the Senate.
"We are concerned, as well we should be, about the budget . . . but we're talking about the demise of rural America . . . the producers in the greatest producing nation in the world," said House Agriculture Committee Chairman E (Kika) de la Garza (D-Tex.). Even if the administration estimates are correct, "we still don't make a dent on the budget. What we're talking about is one extra MX missile," he added.
The House Appropriations Committee also approved $1 billion in loan guarantees, along with additional funds to expedite processing the farm credit program.
The House measure, in addition to advancing farm price support loans, would authorize $3 billion in new federal loan guarantees to help farmers obtain new financing to restructure their debt at lower rates of interest.
In an effort to encourage banks and other lending institutions to participate, the federal government would promise to cover 90 percent of a loan, if it were to go unpaid. Current loan guarantees are less than that. In addition, fees charged to lending institutions for participating in the loan guarantee program would be waived.
In exchange, lending institutions would agree to keep their interest rates to no more than 1 1/4 percent above what it costs them to obtain money.
Finally, farmers would have to show that their cash-flow situation would allow them to cover 100 percent of the cost of maintaining the loan. Current law requires farmers to show that they can cover 110 percent of the cost.