A Moderate Policy For an Election Year

Just about the last thing to be expected in an election year is that Congressmen will pass up a chance to play party politics with a key campaign issue. But that is what happened last week when the Democrat-dominated House and Senate Budget Committees met to set targets for Government spending, revenues and deficit for the fiscal year that begins Oct. 1. They could easily have voted for huge expenditures that would heat up the economy while contributing an important advantage to the Democratic platform. Instead, they resolved on a moderate line that will about keep the economic recovery on course.

Room for Debate. True, the committees did vote for spending of $413 billion, v. the $395.8 billion proposed by President Ford, and for a deficit of about $50 billion, while Ford had proposed $44.6 billion. And their votes on specific items leave plenty of room for campaign argument: Democrats are already pressing a debatable claim that their version of the budget will produce 1.1 million more jobs than Ford's proposals. But whatever they may say publicly some top Administration officials are prepared to live with the committees' overall totals. They have said privately that they would be "very pleased" with any spending figure under $415 billion. Indeed, many economists regard the congressional figures as about the minimum necessary to produce a 5% to 6% economic growth during 1977 and keep unemployment declining (it inched down again in March to 7.5% of the labor force, from 7.6% in February).

Why the trend to fiscal conservatism? One reason is that new congressional procedures, first tested last year, require Congress to look at the budget as a whole, rather than judging spending and revenue proposals individually. Also, reports TIME Correspondent John Berry, "the committee members sensed and responded to a growing conservative mood among the voters."

That mood manifested itself most strongly on defense. The President had proposed military outlays of $101.1 billion, and vowed to veto any reductions. Though liberal Democrats wanted to cut as much as $7 billion, the House Budget Committee reduced Ford's target by only $500 million. The Senate Budget Committee proposed an even more meaningless $300 million cutback.

The other important congressional recommendations:

TAXES. Both committees rejected the President's proposed $4.4 billion increase in Social Security taxes, which would have required many workers to pay up to $49.50 extra next year. They also turned down Ford's call for an $11.5 billion cut in personal and corporate income taxes. Pumping out the money in higher spending rather than through tax cuts will have a more immediately stimulative effect on the economy.

JOBS. The President had proposed phasing out a program that has created 310,000 new jobs, all of them in public service, by the end of 1977. The House Budget Committee not only voted to continue the program, but recommended higher funding ($4.5 billion) for the next fiscal year. The committee also added $1.2 billion to Ford's $2.9 billion request for other job-creating programs.

SOCIAL PROGRAMS. The congressional budgeteers voted to increase spending above Ford's targets for food stamps, health care, educational assistance and environmental programs. If enacted, many of their proposals face a veto, since the President believes that they involve excessive spending and are thus inflationary.

After the full House and Senate approve separate versions of the budget goals, the few differences between them will be hammered out in conference committee. Then the resulting totals will go back before each house for approval. No trouble is expected in the Senate. But in the House, says Washington Democrat Brock Adams, chairman of the Budget Committee, "we have to carry most of the Democrats because we will lose most Republicans, who will stick with the President's budget, and some liberal Democrats, who oppose such heavy defense spending." The vote, consequently, is expected to be a cliffhanger. If the committee's version of the budget fails, it will have to adjust some of the specific numbers and try again.

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