An exhausted Congress stumbled short of adjournment early today as both houses approved a $368 billion catchall spending bill for fiscal 1986, but remained bogged down in a bitter dispute over legislation to cut deficits by $74 billion over three years.
Shortly after 2 a.m., with no end to the deadlock in sight, the Senate abruptly recessed until 11 this morning, thwarting the hopes of its own leadership and the House to end this year's congressional session before today.
The disputed budget-cutting measure that caused the deadlock was passed back and forth between the two chambers throughout the evening in what was described as a high-stakes game of legislative "chicken" over contested provisions for financing the Superfund for toxic waste cleanup.
After the House for a second time in a matter of hours rejected the Senate plan to pay for the cleanup program with a broad-based manufacturing tax, the Senate appeared to be left with a choice of accepting the House position or adjourning without passage of the deficit-cutting plan. It chose, instead, to recess for the night, leaving the impasse still intact and Congress still in session.
The impasse threatened to cause a new fiscal drain because the endangered deficit-reduction package included extension of the 16-cent-a-pack cigarette tax that appeared to have reverted to 8 cents at midnight last night, confronting the Treasury with a loss of more than $100 million a month.
Attempts to pass a short-term extension of the 16-cent levy through March 15 got caught in the bitter crossfire over the Superfund, with both houses passing separate versions of an extension but failing to concur on a final bill.
The compromise deficit-cutting bill was hammered out in a House-Senate conference, and the Senate early last night approved the accord, 78 to 1. The House, however, defiantly insisted on stripping the measure of the Senate's Superfund financing plan, and sent it back to the Senate, which in turn restored the Superfund provisions and bounced it back to the House, which then rejected the measure again.
In the midst of the deepening deadlock, Senate Finance Committee Chairman Bob Packwood (R-Ore.), insisting on the Senate position, declared that the impasse meant that the deficit-reduction package -- the culmination of months of efforts to put a dent in $200 billion annual deficits -- is "dead" for this year.
Even if Congress finally agrees today on a version of the deficit-cutting legislation, President Reagan has threatened to veto it.
With adjournment delayed by two months to deal with deficit, spending and tax legislation, congressional leaders breathed a collective sigh of relief that the 11-month session would soon be over. "We've been here too long," Senate Majority Leader Robert J. Dole (R-Kan.) said as the day began. "It took us longer to do a good job," said House Majority Leader James C. Wright Jr. (D-Tex.).
Passage of the omnibus spending legislation, the last of the big fiscal measures that had tied Congress in knots since Oct. 1, was almost anticlimactic. The House, which overwhelmingly rejected one version Monday, approved it, 261 to 137. The Senate followed by voice vote.
The president signed the measure, which was needed by midnight last night to prevent disruption in government operations.
The White House earlier had threatened to veto the measure on grounds it provides too much for domestic programs and too little for defense. In a final compromise, House-Senate conferees late Wednesday trimmed a little from domestic programs to satisfy the White House and even more off defense to satisfy the House.
The $298.7 billion military budget was trimmed by $1.3 billion, and a $6.3 billion reserve was earmarked for specific purposes so it could not be used to avoid spending cutbacks that will be ordered next year under the balanced-budget act.
A $7,500 increase in the $22,500 limit on senators' income from outside speeches was kept in the measure, as was a change in procedures that could make it more difficult to block a 1987 congressional pay raise.
Domestic spending in the measure was held below fiscal 1985 levels, while defense spending grew by about 2 percent, far less than in previous years. Senate Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) said the measure was about $10 billion under congressional budget limits, $18 billion less than Reagan requested and about $6 billion under last year's spending level.
The continuing resolution is needed to fund agencies for which Congress has failed to pass regular appropriations bills, including the departments of Defense, Agriculture, Treasury and Transportation. Seven of the 13 regular appropriations bills are included in it.
As the bill moved rapidly toward enactment, conferees struggled over the deficit-reduction measure under increasing pressure throughout the day. Congress was clearly in a headlong rush to adjourn, and many members feared that the remaining disputes would continue the stalemate, blocking passage of the centerpiece of this year's congressional deficit-reduction effort.
With the federal deficit now seen as the nation's top political issue, that was a message that few in Congress wanted to take home for the holidays.
The main dispute in the budget-reconciliation bill centered on the Superfund financing provisions. The Senate had approved a broad-based tax on manufacturing to pay for toxic-waste cleanup; the House Ways and Means Committee adopted a similar provision, but it was overturned by the House, which opted for a larger cleanup program to be financed by a narrower tax on the petrochemical industry.
The version agreed to by the conferees after hours of negotiations included a broad-based tax on manufacturing that was designed to raise $5.7 billion over five years.
In other sections of the deficit-reduction measure, the conferees accepted a House provision that would exempt current state and local government employes from mandatory Medicare coverage and taxes. This was important to Ways and Means Chairman Dan Rostenkowski (D-Ill.), whose home city of Chicago includes thousands of public employes who form the backbone of the local Democratic organization.
The deficit-reduction measure also would restructure the tobacco price-support program along lines favored by the industry and tobacco-state senators, limit reimbursements to hospitals under Medicare, and make changes designed to produce savings in many other programs.
Overall, the measure was estimated to include more than $60 billion in spending cuts and about $14 billion in new revenues over the next three years -- about $18 billion of that in the current fiscal year.
In other action, Congress gave final approval to legislation to aid dependents of the 248 soldiers killed Dec. 12 in an Arrow Air crash in Gander, Newfoundland.