How 98th Congress avoided 'gridlock'

When the newly elected 98th Congress marched into town the first of this year , the capital braced for a gigantic gridlock. House Democrats, fortified with 26 more seats for their majority, came to do battle with the recession at a time when President Reagan was pledging to stay his course. The Republican Senate grew cautiously neutral.

But this week, as Congress takes leave for the summer, it is clear that the expected impasse has not occurred. Instead, the first seven months of the session have been marked by compromises.

Democrats have confined their protests to sending ''signals'' and ''messages'' of dissent. Their most serious signal yet, a vote last week to cut off covert aid to anti-Sandinista rebels in Nicaragua, can't by itself halt White House policy.

Meanwhile, the President's threats to wage a veto war with Congress over ''budget busting'' spending have faded. Congressional committees have cut back their appropriations bills, and so far the bills are moving smoothly through the Oval Office.

''There has been an effort to avoid unnecessary confrontation,'' said Rep. Thomas S. Foley of Washington, House Democratic whip.

That cooperative spirit, especially during the early months, allowed the 98th Congress to be unusually productive. The White House, which had seen fears about social security help defeat Republicans in 1982, agreed to a bipartisan solution that had a decidedly Democratic tint.

As the recession deepened, Reagan and Congress also came to terms on a $4.6 billion emergency job relief program. House Speaker Thomas P. O'Neill Jr. (D) of Massachusetts told reporters in February, ''This is not the best bill we Democrats could write, but it may be the best bill we can enact into law.''

Despite the stronger Democratic majority in the House and a more independent GOP Senate, Reagan faced challenges to his program that were more symbolic than real:

Weapons and defense. After a protracted, disjointed debate, the House passed on May 4 a nuclear freeze resolution. Even its supporters conceded it was an unenforceable ''message'' to the White House that Americans want to halt the arms buildup. Three weeks later, the House made a U-turn by approving flight testing and basing plans for the 10-warhead MX missile and then authorizing funds to begin building it. Some Democratic leaders who backed the freeze helped the White House win the MX vote, arguing that backing the missile would hasten arms-control agreements.

Assessing the year so far, House minority leader Robert H. Michel (R) of Illinois said he did not see any major setbacks. ''The MX has survived at least until now,'' he said in an interview, noting that even if Congress has set a cap on military spending, ''individual weapons systems, as such, have not been tampered with.''

Budget and taxes. Against Reagan's wishes, the House and Senate wrote a federal budget that would raise $12 billion in taxes next year and raise defense spending by 5 percent, instead of the 10 percent real growth Reagan sought. But so far that budget remains little more than one more ''signal.'' Democratic Whip Folely said in an interview that even his party would not push hard to write a tax bill opposed by the President. ''There's a point at which you have to recognize reality,'' he said. ''You can't accomplish some things if the President wants to block them.''

The test will come soon after Congress returns in September, when it is required by law to pass legislation enforcing the budget. Eyes on Central America

Foreign policy. On Capitol Hill, Democrats and some Republicans now see Central America as the most volatile issue on the political horizon. When the House voted last week to halt aid to anticommunist guerrillas in Nicaragua, the move could become more than a symbol. The White House must win congressional approval for funds for Central America activities, and that power of the purse strings could force a change if the House follows through with more votes against covert actions.

House minority leader Michel has already bluntly warned the White House to go slow in involving the US in Central America's military problems. The entire Republican leadership this week went to the White House with an urgent request for more consultation in foreign policy matters. Republicans blame the vote on Nicaragua last week on the fact that members first learned of US military maneuvers in Honduras and that US naval fleets were steaming toward Central America by reading the newspaper.

So far, concern about Central America has not reached America's heartland, said Sen. Richard G. Lugar (R) of Indiana. He charged that Democrats are trying to build up the issue because of the economic recovery has taken their chief issue away. But Sen. Nancy Landon Kassebaum (R) of Kansas says the Central America issue has already hit her home state. ''When I'm speaking at home, I'm always asked about it,'' she said. ''I do think there's a growing interest in the issue.''