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Gorbachev challenged on budget, aide Vice president Okd on 2d ballot; Russia withholds funds


MOSCOW -- In a roller-coaster day at the Soviet Congress of People's Deputies, President Mikhail S. Gorbachev yesterday saw his conservative nominee for vice president rejected in a first-round vote and faced a budget challenge from the Russian Federation that he said threatened to destroy the country.

Mr. Gorbachev insisted on renominating the same candidate, Communist Party apparatchik Gennady I. Yanayev, and in a second vote Mr. Yanayev got the majority he needed to become the Soviet Union's first vice president.

Still unresolved was the crisis set off by the decision Wednesday of the Russian parliament, under Boris N. Yeltsin, to withhold about 100 billion rubles in tax revenue from the Soviet Union's budget. The parliament, however, directed republican officials last night to try to reach agreement with other republics and the union government.

Ironically, both challenges came the day after Mr. Gorbachev won the congress' approval for a significant enlargement of his already extensive powers. They showed that as his powers on paper grow, his authority on the Soviet political scene and control over the country continue to decline.

After Mr. Yanayev, 53, who was the only candidate, fell three dozen votes short of the 1,120 needed for election, he said the vote was in part a reflection of dissatisfaction with Mr. Gorbachev.

Mr. Gorbachev cast his demand for a revote in dramatic terms.

"Frankly speaking, this is our last chance," he said. "If this leadership [that is, his own] does not ensure a turnaround, it should be swept from the political arena."

He refused to nominate anyone else for the vice presidency, saying he had based his choice of Mr. Yanayev on their personal relationship.

"There's obviously a battle in society, an alignment of certain forces, a crystallization of positions," Mr. Gorbachev said. "I want by my side a person I completely trust at this difficult turning point."

Before the second vote, the 569-strong conservative deputy faction Soyuz (Union) met and decided to formally back Mr. Yanayev. Its backing, plus Mr. Gorbachev's appeal, made the difference: The second vote was 1,237 for, 563 against, or 117 votes more than needed for election.

Many deputies resented Mr. Yanayev as a classic representative of the old Soviet ruling class: an ethnic Russian who began his career as a Communist youth organization bureaucrat and went on to work as a trade union leader before landing a seat on the party Politburo this year.

Other deputies were wary of his campaign as trade union boss against rapid market reforms. "This is a vote for a market economy or against it," said writer Yuri D. Chernichenko of the Yanayev vote.

"We were trying to help Mikhail Sergeyevich -- help him avoid another mistake," said writer Ales Adamovich, explaining his vote against Mr. Yanayev. The initial rejection of Mr. Yanayev, he said, "shows we're still alive."

But political scientist and editor Fyodor M. Burlatsky said he thought the decisive factor in the opposition was deputies' overall worry about a clear shift to the right in Mr. Gorbachev's circle of advisers.

Major figures such as Foreign Minister Eduard A. Shevardnadze, who announced his resignation last week, and presidential adviser Alexander N. Yakovlev, who seems to be losing his influence if not his job, cannot be replaced by such figures as Mr. Yanayev, Mr. Burlatsky said.

If the Yanayev affair reflected on Mr. Gorbachev's personal political clout, the budget battle with the Russian Federation is a fight for the future shape of the country.

Russian officials say their move is a desperate attempt to force cuts in the huge central bureaucracy and billions in aid to such countries as Cuba and Vietnam, which survive despite popular opposition.

Mr. Yeltsin, they say, is simply making good on his promise to trim the central government back to a minimal structure to handle defense, foreign relations, transport, energy and a few other areas.

Hence, instead of the 119 billion rubles demanded by the union, the Russian Federation is offering only about 24 billion rubles. Mr. Gorbachev said the resulting cuts would harm everything from education to defense and would force other republics to increase prices on raw material exports to finance their budgets, fueling inflation.

"Then each republic will live on the principle, save yourself any way you can," Mr. Gorbachev said. "That will mean the breakup not only of economy but of union."

Deputies divided in the dispute, with some demanding that the congress respect the legal decision of the democratically elected Russian parliament. Others, by contrast, accused Russian officials of violating the Soviet Constitution and sowing chaos for the sake of personal political ambition.

The critics clearly had in mind Mr. Yeltsin, the most popular Soviet politician and Mr. Gorbachev's chief rival. But Mr. Yeltsin was not on hand to defend himself, having left the congress to fly to the Russian gold-mining region of Yakutia in the Soviet Far East.

Mr. Burlatsky said he thought Mr. Yeltsin's disinclination to compromise with Mr. Gorbachev had been sparked by the Soviet president's and congress' refusal to recognize the two main decisions of the recent Russian Federation congress.

The Russian parliament, after long debate, approved private land ownership -- but Mr. Gorbachev immediately demanded a nationwide referendum on whether to permit such private ownership.

Likewise, the Russian parliament last May passed a historic declaration of sovereignty, asserting the priority of republican laws over Soviet laws. But the Soviet congress, with Mr. Gorbachev's support, declined to recognize the sovereignty declarations passed not only by Russia but by the other 14 republics as well.

The Soviet congress voted last night to direct Mr. Gorbachev and republican leaders to negotiate a solution to the budget crisis by Jan. 10. Kazakhstan President Nursultan Nazarbayev, who has good relations with Mr. Yeltsin, suggested that the Russian parliament should agree to divide tax revenues with the union government according to the old formula during the first quarter of 1991. But for his part, Mr. Gorbachev ended the 10-day session of congress on a combative note, again asserting the supremacy of union laws over republican laws and suggesting he would not compromise.

"No one has canceled those [union] laws, and that's what I'll base my action on," he said defiantly. "So don't be surprised."

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