Looking Back on a Budget Coup

Reagan seized the power of the purse--but can he hold it?

Battles of the budget, which once were seasonal struggles, have turned into a form of unending siege warfare in which rounds are fired almost every day. Congressional recesses and even presidential holidays are no longer exempted, as Ronald Reagan demonstrated last week.

"I'm kind of enthused," said the vacationing President, while signing 35 bills at the Century Plaza Hotel in Beverly Hills, Calif. Among them were two that formalized notable White House victories over Congress: a $200 billion defense spending bill and an $11.6 billion foreign aid appropriation, which will give the Executive Branch new flexibility to direct both military and development assistance. But that did not quite end the battle over expenditures for fiscal 1982, which began Oct. 1; large portions of the Federal Government are still being financed under a "continuing resolution" that expires March 31.

Meanwhile, skirmishing over the budget for fiscal 1983 has already begun. The President last week approved cuts of $31 billion in the federal spending proposals he will present to Congress next month. The cuts would mainly affect social programs--Medicare, Medicaid, food stamps, school lunches, subsidized housing, urban renewal grants--that have already been slashed. Even so, the projected deficit would swell to well over $100 billion unless Reagan also agrees to some so-called revenue enhancements, and he has indicated that he might. In a year-end interview with reporters that was released last week, Reagan repeated his general opposition to tax boosts, but hinted that he could make an exception for higher excise taxes on alcohol, tobacco and gasoline.

Notably absent from all this activity was any hint that the budget might be shaped primarily by Congress, as it was in the late 1970s. In a significant political coup, Reagan last year overrode legislative machinery that Congress had designed specifically to give itself permanent control of the budget process. For the moment at least, dazed lawmakers will have to accept, reject or amend presidential proposals rather than enact their own. The President's triumph was the latest skirmish in a seesaw struggle over spending that has gone on since the founding days of the Republic, even though Article I of the Constitution theoretically gives Congress primary power over the federal purse. The first Congresses appropriated lump sums that Presidents George Washington and John Adams and their Cabinets could spend as they wished. Later legislatures captured effective control of federal finances, but the pendulum swung back to the White House under a succession of strong-willed modern Presidents, beginning with Franklin D. Roosevelt. The Nixon Administration haughtily proclaimed that congressional appropriations gave it mere "options" as to how much to spend for what. Provoked by such arrogance, Congress passed the Budget Act of 1974, which is still in effect.

Under that law, Congress sets overall spending, revenue and deficit targets in two budget resolutions that are not even sent to the President for signature or veto. These are backed up, if necessary, by a "reconciliation" bill ordering committees of the two houses to make any changes in specific spending and tax bills needed to meet the targets. Congress during the Ford and Carter Administrations treated presidential proposals as mere starting points for proceeding to chart its own budgets.

Enter Ronald Reagan, a President who sensed a popular mandate to launch his counterrevolution in tax and spending policy. He persuaded Congress to pass a budget resolution providing for deep cuts in spending, and then a reconciliation bill that changed hundreds of laws, such as those governing food stamp and unemployment benefits, to reduce spending by $35 billion. Both measures were written in the White House; the reconciliation bill was done so hastily that Texas Democrat Jim Wright, the House Majority Leader, called it "the sloppiest piece of draftsmanship I've ever seen--a terrible insult to the Legislative Branch!"

When it came time to vote the actual money, Congress would not give the President all the additional cuts he wanted. But after Reagan vetoed a stopgap resolution (theoretically shutting the Government down for a day) the legislators passed a bill that reduced spending by another $4 billion. They did so at the behest of Reagan lieutenants who conferred only with Republican leaders and did not so much negotiate as tell them what the President would and would not accept. Moreover, Congress gave Reagan power within broad limits to take that $4 billion out of whichever programs he chose, over the anguished protest of House Appropriations Committee Chairman Jamie Whitten that "you might as well transfer full control to the Executive Branch and take the Legislative Branch out of business."

In part, Reagan won these victories through shrewd strategy. On the reconciliation bill, for example, the President's calls for bipartisan cooperation induced the Democrats, who control the House, to draft compromises giving Reagan most of what he wanted. He then seized on these concessions to seek still more, artfully cajoling conservative House Democrats to defy their baffled leaders and vote his way. But mostly the President won by exercising raw electoral power. His appeals to the public on TV, and pressure from Reagan supporters in their home districts, convinced many legislators that they could vote against the President only at the risk of losing their seats.

Whether Reagan can continue this budget mastery over Congress is open to question. Forecasts of immense deficits have frightened not only legislators but members of his own Administration, and the cuts in social programs he intends to propose in February will be more painful than those enacted last year, especially since the nation is in a serious recession.

The decisive factor will be whether the President's economic program remains popular. There are arguments for and against the President's 1981 blitz: on the pro side, that only a ramrod approach could force a reversal of economic policy through a Congress that special-interest pressures dispose to delay; on the anti side, that the budget coup violated the spirit of governmental checks and balances. But in the end, Congress bowed because it was convinced that Reagan really did have a national mandate for his policy. He will probably continue to get his way so long--but only so long--as he retains that mandate.

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