The Senate yesterday stripped down Sen. Jesse Helms's amendment restricting federal funding of the arts, and within hours a House-Senate conference committee adopted the new provision, which forbids federal funding of "obscene" art. The drastically reduced amendment leaves out Helms's original bans on funding art that is "indecent" or that "denigrates" a religion, race, ethnic background, age group or handicap. Although the report must still go to the House and Senate floor, yesterday's action heralds the resolution of a five-month battle by offering a compromise that satisfied both supporters and critics of the National Endowment for the Arts (NEA). Senators approved the revised amendment 65 to 31 after Helms (R-N.C.) offered to drop the much-criticized provisions on art that might offend specific groups, and Sen. Wyche Fowler (D-Ga.), over Helms's strenuous objections, then moved to eliminate the word "indecent," saying it was too difficult to define. That action came 11 hours after Helms's full amendment was defeated, 62 to 35, following an impassioned debate that lasted more than three hours. The Interior Approprations conference compromise prevents the NEA from using federal funds to "promote, disseminate or produce obscene materials, including but not limited to depictions of sadomasochism, homo-eroticism, the sexual exploitation of children, or individuals engaged in sex acts." The conferees borrowed from a 1973 Supreme Court decision on obscenity and agreed that NEA work must be without significant literary, artistic, political or scientific merit to be denied funding. The compromise on the NEA's $171 million budget would also establish a 12-person commission to decide whether new standards should be created to guide NEA funding procedures. Both critics and supporters of the embattled NEA said they could accept the compromise legislation. "I don't know if it's a victory for anybody," Rep. Sidney Yates (D-Ill.), a defender of NEA and the chairman of the House Interior Appropriations subcommittee, said of the conference compromise. "Let me put it this way -- I don't like it, but it's the way conferences work," said Sen. James McClure (R-Idaho), ranking minority member of the conference and a supporter of the Helms amendment. At the end of the day, Helms claimed victory. "The NEA has gotten the message," he said. "I don't believe you're going to see any more of this garbage being funded by the taxpayers." He also said the two abandoned sections of his amendment were intended to be "throwaways," included as potential bargaining chips. "The conference exercised sound judgment and gave deep and thoughtful attention to the matter," said Anne G. Murphy, executive director of the American Arts Alliance. "I think reasonable people agreed in a reasonable manner." The compromise also allocates $250,000 to create the commission; requires the NEA to notify Congress if it plans this year to fund the North Carolina and Pennsylvania arts organizations that received the grants that started the NEA funding controversy; retains a House cut of $45,000 (the exact amount of the two disputed grants); and returns $400,000 the Senate shifted from the NEA's visual arts program to other departments. Dropped from the compromise was a Senate proposal to impose five-year bans on federal funding for Winston-Salem's Southeastern Center for Contemporary Art (SECCA) and Philadelphia's Institute of Contemporary Art (ICA). SECCA used NEA money to support a fellowship for artist Andres Serrano, whose photograph of a crucifix submerged in urine was shown in a touring exhibit. ICA organized a traveling exhibit of Robert Mapplethorpe photographs, some of which are homoerotic or sado-masochistic, and some that show children exposing themselves. "That's very good news," said Ted Potter, executive director of SECCA, when told of the conference action. "If that blacklisting ban had remained ... every arts institution in the country had better have been prepared for the worst. That kind of political punishment would have been inflicted again and again. We're happy not only for our institution but for the arts community in general." Although the conferees asked for notification of a SECCA or ICA grant, they did not establish a special procedure for acting on that information. Murphy, of the Arts Alliance, was not concerned about the directive, saying that currently "all grants are reported back to Congress." The Helms amendment was first introduced in July, more than two months into a then escalating battle over the NEA. It was adopted by the handful of senators who were on the floor when a voice vote was called. An outraged arts community immediately launched a lobbying campaign against it, calling it too sweeping, unenforceable, and an incursion on freedom of expression. Members of the House and Senate who disagreed with the amendment said they were uneasy about having to vote on the subject because their votes could be seen as supporting pornography. Helms resisted removing the word "indecent" from his amendment yesterday morning, saying it would leave "a loophole to people who want to continue to abuse" the use of tax dollars. After Fowler's attempt to remove the word succeeded, Helms said he was pleased the measure came to a vote. "I wanted it on the record," he said. "And that's what the debate will be about down the line and in the weeks and months to come." "We already have obscenity statutes," Fowler said. "We're just saying no funds to promote an illegal activity, which is obscenity." The two votes on Helms's proposals forced the conferees to reconsider a possible agreement they had discussed Thursday that would have established the commission but did not include restrictions such as the ban on funding "obscene" art. Conference members of the conference said they would not be surprised if the subject came up yet again for debate. "I think there is a very great chance the issue will again be raised by Sen. Helms," said McClure. The Senate yesterday also confirmed Oregon lawyer John E. Frohnmayer as NEA chairman. Frohnmayer was enthusiastically received during last week's confirmation hearing and an earlier series of visits to members of Congress. Frohnmayer and other supporters of the NEA have defended the agency's process of bringing in panels of artists to recommend grants, which are then reviewed by the chairman and the members of the advisory National Council on the Arts. Murphy said that no matter what legislation emerges, the debates of the last several months have changed the art world and the NEA. Asked if she thought the NEA would now fund a Mapplethorpe show, she said, "I would suspect ... it would be unusual if the Mapplethorpe exhibit was funded now. "I think the climate's already changed, and I think people are sort of skeptical," she said. "But I think the reality is that this {compromise} says the panels will make the decisions and they already do."