However, an amendment added to last year's appropriations bill, after criticism of an exhibition of photographs by Robert Mapplethorpe, bars the endowments from financing "obscene or indecent" art.
The law forbidding grants to "indecent" art could be expanded to other fields.
He added that even an outright ban on Federal financing of indecent art would be constitutional as well.
In the years it took the case to reach the Supreme Court, the controversy over Federal subsidies for indecent art has raged on and, to some extent, moved on.
Following are excerpts from the Senate debate Thursday night and early this morning on a proposal to prohibit Federal support for obscene or indecent art.
More important, the opinion by Justice Sandra Day O'Connor said that the law contained only "advisory language" that did not actually ban federal subsidies for indecent art.
The U.S. Congress, controlled by Democrats at the time of the controversy, imposed restrictions on grants for indecent art.
Early this morning, the Senate rejected his effort to restrict Federal grants for "obscene or indecent" art.
An amendment championed by Senator Jesse Helms barred the endowment from financing "obscene or indecent art."
Those who wish to create indecent and disrespectful art are as unconstrained now as they were before the enactment of this statute.