Democrats ready challenges to Reagan on budget, arms control

While national attention focused on the Iran-contra hearings in the Russell Senate Office Building, it was business as usual elsewhere on Capitol Hill. The majority Democrats brought Congress a few steps closer to full-blown confrontation with the White House on the federal budget and on arms control. Eight separate Senate committees put final touches on their trade bills, to be combined into one omnibus bill on the Senate floor, as the Reagan administration anxiously looked on. Appropriations committees in both the House and Senate continued to craft spending bills that were sure to raise President Reagan's ire.

Democrats, eager to capture the White House in 1988 and desperate to show the country that they can responsibly govern, have plunged ahead with their agenda, professing indifference to the protests of the White House. President Reagan, stripped of a sympathetic Republican majority in the Senate, threatens to rely on veto power to protect his legacy. Congressional Republicans, who set the legislative pace in the early days of the Reagan era, are largely left to try to hold up Democratic initiatives, or to rally in support of presidential vetoes.

The Iran-contra hearings have introduced a new element to that mix. During the past week, allegations of misconduct by administration officials have tumbled from the witness table in the ornate, second-floor caucus room in the Russell Building - the same chamber in which the Senate Watergate hearings were held.

Similar recitations of wrongdoing will stretch on through the summer months, even while Congress and the White House grapple with an array of important and controversial matters: spending priorities and taxes, miltary programs, arms control, trade issues, and hot-button foreign-policy items like aid to the Nicaraguan contras.

How the Iran-contra hearings affect the push and tug of congressional politics will depend, naturally, on the course they take. If interrogators unearth details that call President Reagan's veracity into question, then relations between Congress and the White House will wither.

``Watch us head for the hills,'' says one senior House Republican aide, hastening to add that he doesn't expect the hearings to unveil facts that will impel Republicans to abandon their President.

Barring that worst-case scenario, Republicans say they believe that the political damage has occurred, and that the hearings will fade into little more than a noisome reminder of a well-intentioned policy gone sour. ``It seems to me that the damage has been done,'' says Sen. Richard Lugar (R) of Indiana. ``Politics is a little like the futures market - the liability of Iran-contra has been discounted.''

Others concur, noting how readily the controversy surrounding Democratic presidential candidate Gary Hart's alleged womanizing deflected media attention from the Iran-contra affair as the hearings got under way. As the hearings delve into the minutiae of the affair, they say, public attention is bound to flag. ``In spite of Dan Rather and all the other news hounds being in the city, it will soon become tedious,'' assures Rep. Trent Lott (R) of Mississippi, the House minority whip. ``They'll leave town.''

Democrats, for their part, have studiously avoided gloating over the administration's troubles. The Iran-contra affair is rarely invoked in floor debates, although that is certain to change in the fall when Congress considers the administration's request for additional contra aid.

So far, the only legislation spawned directly by the controversy consists of a bill that would require notification of congressional leaders within 48 hours of the beginning of a covert operation. In addition, the foreign aid bill pending in the House tightens administration flexibility in allocating aid and restates a prohibition against linking United States aid to an agreement by any recipient country to aid the contras.

But Republicans and Democrats alike see the Iran-contra affair, and the attention lavished on the ongoing hearings, as an undeniable windfall for the President's opponents. ``He's been hurt by the affair, but not as much as he might have been,'' says Rep. Henry Hyde (R) of Illinois, a member of the joint committee. ``When he gets on the phone to ask for someone's vote, he's not going to have quite the authority he used to.''