WASHINGTON — Republican Senate leaders disclosed Friday that a new compromise proposal by President Reagan designed to win broader congressional support for his Central American policy would permit the CIA to resume arms shipments to Nicaraguan rebels fighting the leftist Sandinista government.
As a result, Reagan's revised plan has failed to win the support of the moderate Democrats he needs to avoid an embarrassing defeat when Congress votes on the issue next week.
"We demand movement on the part of the President in our direction," House Intelligence Committee Chairman Lee H. Hamilton (D-Ind.) declared.
Hamilton and five other House members disclosed a formal Democratic alternative to the White House request for $14 million in aid to the Nicaraguan rebels, known as \o7 contras. \f7 It would permit no assistance of any kind for the rebels, giving money instead to refugees from the Sandinista regime and to the four-nation Contadora Group that has been seeking a negotiated peace in Central America.
Shultz Rejects Plan
Secretary of State George P. Shultz quickly condemned the Democratic alternative as an "unworkable and unacceptable" plan that virtually calls on the contras to surrender.
White House officials described the President's compromise plan, which he agreed to Thursday after it became clear that his original bid for contras aid was headed for defeat in Congress, as prohibiting any expenditure of the requested $14 million for arms for the contras during the current fiscal year, which ends Sept. 30. The plan would allow the funds to be spent for "non-lethal" supplies, such as uniforms.
But Senate Republicans, who obtained a copy of the three-page compromise plan, said the President's proposal would also abolish the existing restrictions that Congress imposed more than two years ago on the expenditure of CIA contingency funds for paramilitary operations in Nicaragua. White House officials have never mentioned this provision publicly.
Senate Foreign Relations Committee Chairman Richard G. Lugar (R-Ind.) said the President views this as a fair "trade-off." As Lugar interpreted it, the CIA would be prohibited under the plan from using the $14 million to buy weapons for the contras, but would be allowed to use the contingency funds for any type of military aid, including arms.
Lugar noted that the CIA expenditures still would be overseen by the House and Senate intelligence committees and that no funds could be spent without the knowledge of Congress. The contras have received no military funding since last summer under a ban imposed by Congress.
White House spokesman Larry Speakes suggested that the President's proposed compromise had won him a few additional votes in the Senate and House. But Lugar said Reagan will be forced to make further concessions over the weekend to obtain support from a majority in the Senate.
Both the House and the Senate are scheduled to vote on the issue Tuesday. Reagan will meet Sunday with a bipartisan group of Senate leaders in an effort to work out a measure that will pass that chamber.
Lugar indicated Friday that the President will not even try to seek a similar compromise with leaders of the Democratic-controlled House. Thus, if the Senate approves some form of aid to the contras, the two chambers probably will be forced to resolve whatever differences remain in a House-Senate conference committee.
'No Compromise At All'
Although most Democrats were still unaware of the compromise that the President was proposing, those who learned about it Friday called it unacceptable. A top House Democratic committee aide said the proposal appeared to be "no compromise at all."
By contrast, the House Democrats' alternative would provide $10 million for humanitarian aid--food, clothing and medical supplies--to Nicaraguan refugees who have fled that war-torn country. That aid would be funneled through the United Nations or the Red Cross. An additional $4 million would be available to the Contadora nations--Mexico, Panama, Venezuela and Colombia--to assist their effort to promote a regional peace treaty.
Rep. Michael D. Barnes (D-Md.), a co-author of the Democrats' alternative proposal, predicted that the House would never pass any aid intended for the contras, even if it were only for humanitarian purposes.
"Dollars are dollars," he said. "If you give them money for food and medical supplies, that leaves them money to spend on military equipment."
A 'Silly' Plan
Barnes predicted that the Democratic proposal, which was co-sponsored by two Republicans, would pass the House on Tuesday. He argued that the plan gives the Nicaraguan government an opportunity to come to the negotiating table before fiscal 1986, which begins Oct. 1, and Reagan can return to Congress again seeking military aid for the contras.