Handing Congress a Hot Potato

By John S. DeMott

Before it was even enacted it was something of a joke, laughingly likened to the girl who, unable to say no, buys a chastity belt and throws away the key. In December, Congress passed, and President Reagan signed into law, the Gramm- Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985. Cast as an amendment to a measure raising the U.S. debt ceiling above $2 trillion, Gramm-Rudman was the sugarcoating to help embarrassed Congressmen swallow that gargantuan figure. The law required that annual federal deficits, now hovering at the $200 billion level, be reduced in stages to zero by 1991. It also said that if Congress and the President could not agree on the cuts, across-the-board reductions, determined by the U.S. Comptroller General, would be ordered automatically.

Even the law's drafters were sheepish about what amounted to an admission that Government lacked the wit or the courage or both to make its own decisions on spending. "It's a bad idea whose time has come," admitted New Hampshire Republican Senator Warren Rudman, one of the bill's co-authors (the others: Texas Republican Senator Phil Gramm and South Carolina Democratic Senator Ernest Hollings). New Jersey Democrat Peter Rodino, chairman of the House Judiciary Committee, called it a "flagrant abdication of congressional responsibility." Last week the Supreme Court leveled the ultimate criticism, ruling that a key provision of GrammRudman is unconstitutional.

By a 7-to-2 vote, the court held that turning budget-cutting authority over to the Comptroller General violated the principle of separation of powers by vesting Executive Branch authority in a Legislative Branch official. The Comptroller General is the director of the General Accounting Office, Congress's chief watchdog on federal programs. Though appointed by the President to a 15-year term, he can be removed from office only by Congress. That power of dismissal, wrote outgoing Chief Justice Warren Burger in his final opinion for the court, means that the Comptroller General is "subservient" to Congress and cannot be entrusted with Executive powers. In a vigorous dissent, Justice Byron White criticized the majority's adherence to a "distressingly formalistic view of separation of powers" to derail "one of the most novel and far-reaching legislative responses to a national crisis since the New Deal."

The court let stand the rest of Gramm-Rudman, including the dictum that the deficit be cleared in five years. "The law is alive and well," said Rudman. Undeniably, though, the decision stripped Gramm-Rudman of its muscle. The sensitive business of deciding what to cut was tossed back into the political arena just as re-election campaigns intensify.

Under a fallback provision in the law, written in anticipation of a negative Supreme Court ruling, the Office of Management and Budget and the Congressional Budget Office will still make the initial calculations of how much federal spending must be reduced to meet the deficit reduction targets. But then, instead of having the Comptroller General make the final calculations, a joint House-Senate committee must do so and then submit its work to Congress for approval.

President Reagan, who first favored the bill and later wavered when he realized it could force him to choose between automatic cuts in defense and increased taxes, greeted last week's decision with some relief. "The focus of compliance with Gramm-Rudman-Hollings," said the President, "(is) back where it belongs: on the Congress." Senate Majority Leader Bob Dole was equally righteous: "Congress can't hide. We thought we had an umbrella to duck the downpour, but now that's not there."

One immediate task for Congress will be to re-enact $11.7 billion in spending cuts for the current fiscal year that were ordered last March 1, the first of the act's reductions determined by Comptroller General Charles Bowsher. Otherwise, those sequestered funds will have to be released by Sept. 5, adding to the budget deficit just weeks before the midterm elections. Even Mike Synar, the Oklahoma Democrat who led eleven House colleagues in bringing suit against Gramm-Rudman, expects Congress to approve this first round of cuts. Said he: "It's like Humpty-Dumpty falling off the wall. To put it back together would cause a lot of confusion."

Of greater concern is next year's $1 trillion budget. The spending resolution Congress approved just before recess last month calls for a deficit of $142.6 billion, $1.4 billion below the Gramm-Rudman target of $144 billion. But critics say that number is based on overly optimistic predictions of economic growth. If the U.S. economy -- and federal revenues -- continue to slow down, the deficit for fiscal 1987 could swell to $30 billion above the target.

Under Gramm-Rudman, that would require a $15 billion cut from the $292 billion defense budget, which has already been held to a 2% increase over the fiscal 1986 figures in the compromise plan painfully worked out by the House and Senate. The bill would also call for large chops to popular programs such as student loans and farm assistance. Rather than enduring the howls of protest from the White House and Defense Department on one side and voters on the other, Congress would surprise no one if it finds a way to duck this onerous responsibility. Just like the old days.

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With reporting by Neil MacNeil and John E. Yang/Washington