A laboriously crafted compromise that would have eliminated specific restrictions on the type of work funded by the National Endowment for the Arts was derailed in the Senate yesterday when the Appropriations Committee reinstated a controversial list of forbidden subject matter.

The committee also included language empowering the NEA to require grant recipients to sign a pledge of compliance with the content restrictions.

The funding bill for fiscal year 1991 is expected to reach the Senate floor by tomorrow. It may face further amendment there.

The House funding bill allots $180 million to the endowment, $5 million more than the administration requested. The Senate committee trimmed that to $170 million.

The Appropriations Committee action appears to mean the demise of the House compromise, which promised to resolve the ongoing battle over the endowment.

After months of dispute and negotiation, the House finally coalesced last week behind a bill to reauthorize the endowment without imposing content restrictions. Instead, the House bill would allow the endowment to recoup funds from grant recipients who used government money to create work found obscene by a court. A similar reauthorization bill had attracted bipartisan support in the Senate Labor and Human Resources Committee.

But now, congressional observers agree that legislation to reauthorize the endowment is unlikely to reach the Senate floor before Congress adjourns. That means the hard-fought compromise, drafted by Reps. Pat Williams (D-Mont.) and Thomas Coleman (R-Mo.) after months of conflict, will not become law.

Instead, the endowment's life will be extended for a year through the appropriation. Anticipating that the Senate might not have time to act on the reauthorization, the House late Monday night duplicated its reauthorization legislation and attached it to the appropriation bill, rejecting an attempt to impose content restrictions in the funding bill.

The NEA legislation had encountered much turbulence in the House and the success of the compromise there seemed likely to propel a similar bill through the Senate. Last week, four key members of the Senate Labor and Human Resources Committee wrote to Appropriations Committee Chairman Robert Byrd (D-W.Va), urging him to follow the compromise approach when the appropriations bill got to the Senate.

The letter was signed by Claiborne Pell (D-R.I.), Edward Kennedy (D-Mass.), Orrin Hatch (R-Utah) and Nancy Kassebaum (R-Kan.).

But yesterday morning, at a meeting of an Appropriations subcommittee, Byrd eliminated the compromise. In its place, the subcommittee inserted a series of content restrictions that had been imposed in the endowment's fiscal 1990 appropriation. The full Appropriations Committee approved that change later in the day.

Those restrictions forbid funding of works that "may be considered obscene, including but not limited to, depictions of sadomasochism, homoeroticism, the sexual exploitation of children, or individuals engaged in sex acts and which, when taken as a whole, do not have serious literary, artistic, political, or scientific value."

The content restrictions have sparked considerable protest in the arts community. The NEA requirement that grant recipients certify compliance with the restrictions has prompted several artists and arts organizations to reject NEA funding. Three lawsuits have been filed to challenge the constitutionality of the restrictions.

The Appropriations Committee's action frustrated and confused Hill aides who had spent long hours working for the compromise. Lobbyists who supported the approach also were stymied. "There is no light at the end of the tunnel," said Melann Verveer of People for the American Way.

On the Senate side, staffers had no idea what would come next. Several staffers and observers said senators who support the compromise bill are reluctant to take on Byrd, who is influential in controlling the purse strings.

Byrd said yesterday he reinserted last year's content restrictions to hurry the bill on its way to the Senate floor. "It's a very difficult bill and it is a very controversial issue," he said.

Appropriations Committee member James McClure (R-Idaho) said the committee's action was an attempt to help the endowment.

"I'm not really certain what's going to happen on the floor of the Senate," he said. "... I think that's hard to forecast. There are people who wish to hamstring the endowment and those who wish to retaliate by striking large sums of money. ... We tried to walk through the extremes."

McClure said he couldn't be specific about amendments that might be offered to cut endowment funding. "I've heard lots of different figures but I can't be precise and I don't have any names to put with any of them," he said.

Many observers expect some proposal from Sen. Jesse Helms (R-N.C.), who has been a vocal critic of the endowment.

McClure said he will oppose legislation that does not include specific content restrictions. An approach that would penalize grant recipients for creating obscene work is "specious," he said, because Congress must go beyond outlawing work that is legally obscene.

Eventually, the Senate and House versions of the appropriations bill will have to be reconciled in a conference. Rep. Sidney Yates (D-Ill.), who opposes content restrictions, will attempt to preserve the House's compromise approach.

Congressional observers said yesterday that they could not discern an obvious accommodation between the two bills.

Williams, who helped forge the House bill, said he was confident that approach will prevail. "There was a very strong vote, bipartisan, from the House," Williams said. "That's what I've armed Sid Yates with."