Carter's Strategy on the Budget

Bruised in the past, he is playing it smarter this year

"We are going to see a lot of very close votes and probably a lot of vetoes." So predicted a top economist for the Federal Government last week as Jimmy Carter put the finishing touches on the fiscal 1980 budget that he will submit to Congress on Jan. 22. Budget battles between the White House and Congress are an annual event, but this year the President, Democratic leaders and most Republicans are in rare general agreement. They know that there is a conservative tide running in the country and that federal spending must be checked. So what is the fight? It is over just how to split those scarce dollars, and it is shaping up as a delicate exercise in political intrigue.

Battle-tested and somewhat bruised from his past encounters with Congress, Carter is playing it smarter this year. He has personally shaped the broad outlines of the budget. They are: total spending of $533 billion, about 8% more than in the current fiscal year, which ends on Sept. 30; a projected deficit of $29 billion, a respectable $12 billion less than this year. Well aware of growing public concern over the Soviet military buildup, Carter is proposing a 10% boost in defense spending, to $122.8 billion, which more than offsets 7% in projected inflation and thus meets his promise to NATO members of a 3% increase in the U.S. military budget.

This means a pinch for domestic social programs. Democratic liberals, urban state Governors, big city mayors, many labor chieftains and black leaders all think that their constituencies are bearing an unfair share of the new frugality. They have powerful allies in Washington: the Cabinet members and other high-level bureaucrats who oversee domestic social-welfare programs. These men and women, in turn, have both public and back-door ties to influential members of Congress.

Carter has sought to offset that alliance in several ways. First, he called in his most likely critics, including mayors, Governors and black leaders, for well-publicized talks at the White House. He expressed sympathy for their problems but made it clear that he faced a cash crunch. Then, tentative budget figures were leaked that suggested severe cutbacks in such fields as education, health, urban renewal, housing, mass transit and jobs for the hard-core unemployed. As expected, the drastic slashes set off cries of alarm.

Next, Carter, continuing to follow the prepared scenario, appeared to yield, announcing a "restoration" of various funds. For example, he agreed to provide $1 billion more than the leaked estimate for public service jobs and some $150 million more in aid to the most economically depressed cities. Last week he raised the funds for education to $11.1 billion, which is about $1 billion more than was spent last year. He also restored $50 million for health programs, including basic research and preventive care for the poor. By seeming to give ground, Carter expects to take some of the punch out of attacks from budgetary critics like Democratic Senator Ted Kennedy.

Carter further hopes to dampen criticism with a special White House task force chaired by Hubert Harris, chief congressional liaison for the Office of Management and Budget. The group includes representatives of Frank Moore's congressional lobbying staff, Jody Powell's press office, Jerry Rafshoon's public relations staff and aides to Vice President Walter Mondale. The task force will try to detect congressional opposition in its earliest stages and lobby against it. In addition, the group will strive to keep the bureaucrats in line.

Will the White House strategy work? Congressional veterans view Carter's approach as shrewd, but they predict that he is still headed for trouble. On the one hand, Maine Democrat Edmund Muskie, chairman of the Senate Budget Committee, doubts that the deficit can be kept under $30 billion. On the other hand, Oklahoma Senator Henry Bellmon and Virginia Congressman Joseph Fisher see no reason why another $5 billion cannot be cut from Carter's budget. Even liberal Democratic Senator William Proxmire of Wisconsin insists that "all that talk about this being a tight budget doesn't wash." He wants to slash another $10 billion.

Despite all the jockeying, the outcome of the budget battle may depend upon the state of the economy. If the economy does not falter, the President's budget may prevail. If there is a recession, the pressure to increase spending or to cut taxes, either of which would lead to a larger deficit, might prove irresistible. That would upset all of the White House's carefully laid plans for ushering Carter's budget through Congress.

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