1986 plate is full of '85 leftovers. Congress and Reagan dueled throughout 1985, and the year ahead is likely to bring them eye to eye once again on taxes, deficits, trade

By , Staff writer of The Christian Science Monitor

After lumbering along for most of its unusually long session, the United States Congress picked up its pace during the closing weeks. The legislature's final kick at the finish line leaves behind the heftiest and probably most costly farm bill ever passed, plus House approval for the first major overhaul of the tax code in 30 years.

And if the lawmakers failed to actually reduce the federal budget deficit, they did pass a law that promises to balance the budget by 1991. ``We at least have set in motion a new discipline,'' Senate majority leader Robert Dole said of the measure.

``It's been tedious in a sense,'' the Kansas Republican said of his first year as Senate leader, citing intense partisan bickering in the upper chamber. But he added, ``We believe, overall, it's been a pretty good session.''

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House Speaker Thomas P. O'Neill Jr. was more ebullient. The Massachusetts Democrat rated the Congress ``as high as any in my 33 years.''

He applauded fellow House Democrats for fulfilling their role as ``watchdog over'' President Reagan in areas ranging from aid to Nicaraguan anti-Sandinista rebels, to protecting the social ``safety net'' for the poor.

President Reagan often played catchup and sometimes employed defensive strategies, as Congress pushed on issues such as protection for some US industries facing stiff foreign competition, and South Africa sanctions.

On several issues, Mr. Reagan lost on initial votes and had to work hard for reversals. His top domestic program, tax reform, almost collapsed when his own party mounted the opposition in the House.

But the popular President continued to control the agenda and avoid reversals of his core policies. ``He can still produce when he puts his mind to it,'' said House GOP whip Trent Lott.

``They beat us like a bongo drum,'' said the Mississippi Republican after the Reagan administration turned the votes around and won House approval for the tax-revision bill. Mr. Lott had helped lead the bill's GOP opposition.

President Reagan has, so far, also kept his defense buildup going.

Congress handed the Pentagon big victories, even as lawmakers lam-basted military waste. A decade-long controversy over the MX missile was settled, as a last attempt to cancel funding for the weapon failed. The missiles are scheduled to be built, even if the program is scaled down.

The lawmakers agreed to go along with building a new generation of nerve-gas weaponry for the first time since 1969. They also gave a green light to Mr. Reagan's Strategic Defense Initiative, a space-based missile defense system.

After an initial defeat for his Central America policies, Mr. Reagan won approval for sending $14 million in aid to rebels fighting the Marxist government of Nicaragua. He had to settle for ``nonlethal'' aid, but the congressional approval gave an important lift to his policies for that region.

The President also held the line on his promise not to increase taxes. Although lawmakers in both parties frequently said some increase would be needed, few dared to lead the charge.

Sen. Bob Packwood (R) of Oregon echoed many fellow members of Congress recently, saying, ``There will be no tax increase coming out of Congress'' unless the President seeks one.

The test will probably come next year when the balanced-budget law takes effect. Known for its sponsors, Sen. Phil Gramm (R) of Texas, Sen. Warren B. Rudman (R) of New Hampshire, and Sen. Ernest F. Hollings (D) of South Carolina, the law mandates reducing the federal deficit to zero by fiscal year 1991.

Under the new law, lawmakers expect that Reagan will have to choose between raising taxes or taking big cuts in defense.

The sweeping Gramm-Rudman-Hollings law could open the door for the all-out attack on the federal deficit that eluded Congress this year. Lawmakers in both parties maintain only qualified hopes that the bill will actually balance the budget.

``Gramm-Rudman is more to force the President to come to the table'' and bargain on deficit cutting ``than anything else,'' says Rep. Richard A. Gephardt of Missouri, chairman of the House Democratic Caucus. ``This is to force the confrontation.''

The tax-overhaul measure could also become a test of whether Reagan might accept some new revenues.

As the tax bill moves to the upper chamber, Senate Finance Committee chairman Packwood warns that he cannot fulfill promises Reagan made for lower rates and industry tax breaks unless the President agrees to some new revenue sources. The senator has consistently pointed to an oil-consumption fee as an example.

When Congress returns to work in the new year, it will face many of the old issues:

Deficit reduction. When the new session begins, the lawmakers must either find new spending cuts, or else automatic spending cuts outlined in Gramm-Rudman-Hollings take effect March 1.

The Reagan administration must meanwhile produce a budget with a deficit of only $144 billion by early February to meet the requirements for the 1987 fiscal year. Since the current deficit is about $200 billion, writing such a budget will require major chops in spending, and wholely eliminating some programs.

Tax overhaul. An army of lobbyists will watch every movement of the bill in the Senate, especially since it appears certain that some form of tax revision will be enacted. The final version will probably shift some tax burden from individuals to corporations, and preserve the federal deduction for state and local taxes.

Trade. Both Senate majority leader Dole and House Speaker O'Neill place problems in international trade high on the list for action next year.

The House is expected to act soon on a major trade bill aimed at penalizing countries that export goods to the United States but maintain barriers to American imports.

Politics. Since 1986 is a congressional election year, politics will play a major role, especially in the Senate, where Democrats hope to regain the majority.

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