Does Anyone Have a Budget?

By GEORGE J. CHURCH

Politics as usual and legislative anarchy in Congress

Seven competing budgets. Flocks of nuisance amendments proposed for the sole reason of forcing opponents to cast embarrassing "no" votes. In this spirit of politics as usual and collective irresponsibility. Congress last week confronted one of its gravest duties: crafting a budget resolution that would provide a set of spending, revenue and deficit targets for the next year.

The Senate did, finally, produce a budget, approved Friday by a vote of 49 to 43. It estimates federal spending in fiscal 1983 at $784 billion; revenues at $668.2 billion, a figure to be reached by raising taxes $21.2 billion (never mind which taxes, that is to be decided later); and a deficit of $115.8 billion. The key move was a decision by the Republican majority to abandon an earlier proposal that called for unspecified "saving" of $40 billion in Social Security over the next three years. Instead, the Republicans substituted a vague directive to Congress to do whatever may be necessary to prevent the Social Security system from running out of money and keep pension checks going out on time, but not to take any action until after the November elections. Indiana's Dan Quayle protested that the resolution was "a cop-out," which indeed it is. But Minnesota's David Durenberger effectively ended the argument by telling his G.O.P. colleagues that "we are in the process of losing [the votes of] the aged of America," who fear that their benefit checks might be cut.

To mollify their less conservative members, the Senate Republicans agreed to a long string of changes providing a bit more spending for Medicare, for housing, for veterans' benefits, for student loans. After those changes, and the decision to do nothing at the moment about Social Security, spending would be cut by $9 billion less than the leadership had originally envisioned. Then the G.O.R closed ranks in a series of floor votes to beat off Democratic amendments, offered with no hope that they could pass.

The scene in the House, which begins voting on the budget this week, was fairly close to legislative anarchy. Seven budgets had been drafted by the end of last week: three major ones by Democratic leaders headed by Speaker Tip O'Neill, Republican leaders and a bipartisan coalition of moderates; one by staunch conservatives, two competing ones by liberals and one by the 18-member Black Caucus. In addition, floor rules will permit votes on 68 separate amendments. House Republican leaders produced a budget that looks very much like the Senate document but, somehow, projects $ 15 billion less spending. How did they accomplish that feat? An aide to Senate Republican chiefs had a simple answer: "They lie." Retorted an aide to the House G.O.R leaders: "Our numbers are no phonier than anyone else's." At this point, not one of the budget resolutions seems able to win the 218 House votes needed for passage.

The White House has contributed to the chaos by staying aloof. President Reagan has confined himself to generalities: social spending should be reduced, military expenditures should not be cut deeply or taxes raised sharply. To the dismay of some Congressmen who want guidance as to what the White House might accept, Reagan has carefully avoided talking numbers.

Administration aides leave no doubt that this is a deliberate political game. The President is preparing to denounce Congress if it produces a budget resolution with gargantuan deficits, and to take the credit if it somehow passes a plan to stem the red ink. Reagan has been explicit on only one point, there must be no tampering with the third stage of his cherished income tax cuts, a 10% reduction that will take effect in July 1983.

The outcome just might be no budget resolution at all. Says California Democrat Leon Panetta, chief drafter of the bipartisan moderates' budget: "There is a fifty-fifty chance that nothing will pass." In that case, Congress would have to finance the Government by a series of continuing resolutions, a prescription for administrative chaos since no department would be sure how much money would be available to it, or pass spending bills piecemeal, with no overall guidelines.

There is an uncomfortably strong chance too that even if Congress were to pass a budget resolution directing itself to increase taxes substantially, it would later fail to agree on a bill that would actually raise any new revenues. Since income tax boosts have been ruled out at Reagan's insistence, new or higher taxes would have to be levied on business, and legions of lobbyists would mount well-financed campaigns against any that might be proposed. Any of these outcomes would probably cause deficits to swell. Senators and Congressmen of both parties fear that voters infuriated by the inability of the Legislature to bring any order to Government finances would cast ballots indiscriminately against all incumbents running for reelection.

A more urgent worry is the impact of continued budget waffling on financial markets. Wall Street has been anxiously waiting for Congress to pass a budget resolution that offers some credible hope of holding deficits to about $100 billion a year. Already, uncertainty about how high future deficits will reach, and how much the Government will have to borrow to cover them, is preventing interest rates from falling--which they must if there is to be any strong recovery from the recession. If there is no budget, or if Congress passes one with deficit estimates that the financial community finds unacceptable, interest rates will surely stay high. That would delay, weaken or even prevent economic recovery--and provoke exactly the voter outrage that Congress fears.

--By George J. Church.

Reported by John F. Stacks and Evan Thomas/Washington

With reporting by John F. Stacks, Evan Thomas

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