President Reagan's new Central American "peace proposal" has been under discussion for several months, and some aides jocularly called it the "escrow account" plan for providing aid to rebels opposing the leftist government of Nicaragua, administration officials said yesterday.
Reagan approved the plan Wednesday after he was told bluntly by Republican congressional leaders that his longstanding request for $14 million in direct military aid for the rebel "contras" had no chance on Capitol Hill.
This news did not come as a surprise. Reagan's national security affairs adviser, Robert C. McFarlane, said administration officials had been discussing alternative proposals since January, and that yesterday's proposal was "culled from . . . conversations which went on on both sides of the Hill."
Another senior administration official said that the final proposal, reflecting these consultations, was drawn up three weeks ago at the State Department.
It was called the "escrow account" plan because it put money that ultimately could be used for military purposes on hold while peace negotiations were being conducted. But a central feature of the plan is that the contras could draw upon the funds, for food and medical purposes, which would free the money they currently are spending for these purposes to buy arms.
Congressional resistance to direct military aid for the contras surfaced quickly at Wednesday's meeting at the White House between the president and congressional leaders. House Minority Leader Robert C. Michel (R-Ill.) said he told Reagan that the request for $14 million in military aid for the rebels was "dead in the water."
Reagan did not at this time offer an alternative, McFarlane said, although the proposal the president announced yesterday had "congealed in his the president's own mind."
Instead, Reagan met with senior officials after the leadership meeting to discuss three options presented to him by McFarlane. Late Wednesday morning, the president gave tentative approval to the "escrow account" plan, officials said.
However, McFarlane said, the approval was conditional on a positive response from Republican congressional leaders and the tacit blessing of Colombian President Belisario Betancur, who was meeting with Secretary of State George P. Shultz on Wednesday afternoon.
While Shultz sounded out Betancur, who yesterday referred to the Reagan plan as "positive," McFarlane visited Capitol Hill to confer with Republican leaders. He also received a positive response.
"I told him Reagan that the reaction was that this was constructive, that it was, on the whole, viewed positively, and while there was still considerable opposition and many critics, that it had enhanced the chances for success," McFarlane said.
In deciding to seek immediate funding for the rebels, Reagan rejected two options that would have delayed a vote, according to an official familiar with the White House discussions.
Both options would have postponed efforts to obtain funding for the contras until late in May, after Reagan had returned from a European trip.
This course reportedly was favored by Senate Majority Leader Robert J. Dole (R-Kan.) because it would allow Reagan to devote a full two weeks to winning congressional approval of his budget between the 10-day vacation in California which he begins today and his European trip.
One option called for Reagan to announce that he was putting off the efforts to obtain funding. The other called for him to announce nothing, but postpone submitting the funding request to Congress.
Officials said that an argument against postponing the effort to obtain funding is what one of them called "the desperate situation of the freedom fighters." One official said that Reagan, who has been urged by conservatives in and out of the administration to wage a vigorous fight for aid to the contras, was inclined to push ahead with his original plan despite the odds against it.
In an interview Monday with The Washington Post, the president said of the rebels, "I think we're obligated to try and lend them a hand."
Two White House officials -- communications director Patrick J. Buchanan and departing White House liaison Faith Ryan Whittlesey -- expressed concern in administration discussions that the State Department was planning to "abandon" the contras, officials said. But they said that once the alternative proposal was explained to them yesterday, it received their support. "Pat's very practical," one official said of the communications director. "Once he realized that the alternative was our only hope of going forward with aid to the freedom fighters, he came aboard."
Reagan's approval of the alternative plan reflected McFarlane's view that some conservative Democrats are looking for a way to back the administration if the contras are restrained.
"I believe that the discourse with the Congress since January has made clear that many see the legitimacy of the freedom fighters' cause," McFarlane said.
"Many disagree with the means used in the past for supporting them and are seeking an alternative formula. It's from listening to those people that we've put this together. And while we couldn't say today that the votes are there, we believe the climate is changing."