Blink Or Go Broke

In the Washington version of budget brinkmanship, the stakes range from the health of the world's largest economy and the strength of its armed forces to the fate of a college student's grant. All that and more were put at risk last week, when the capital's political gamblers -- the President and the Democratic leaders of Congress -- allowed the nation to bump up against the threat of bankruptcy.

With only 17 hours to spare, Congress passed and George Bush signed a bill lifting the U.S. debt ceiling to $3.12 trillion, thus averting a default. Granted authority to draw on an additional $250 billion of other people's money, the Treasury is again able to pay the Government's bills.

The regular, inescapable need for new borrowing authority has inspired Democrats and Republicans alike to play dangerous, self-serving games. Hoping to revive Bush's cherished reduction in the capital-gains tax, Senate Republicans considered attaching it to the debt-ceiling legislation. Majority Leader George Mitchell, increasingly playing the role of an unyielding Horatius at the Bridge, blocked them. Democrats similarly toyed with piggybacking onto the debt bill measures that Bush would veto if passed separately. Both sides backed off only when the nation was on the brink of insolvency.

Nor are the games over. In a feisty mood, Bush urged reporters last week to go after Congress for thwarting his and the nation's will. He vowed to leave in place automatic spending cuts that will trim $16.1 billion from the $1.2 trillion 1990 budget unless Congress on its own cuts about $14 billion from the deficit without resorting to "gimmicks." Unmentioned was the fact that most of the existing gimmicks were first proposed by the Administration.

Bush's threat was undermined a day later by his own Defense Department. Pentagon Comptroller Sean O'Keefe told the Senate Armed Services Committee that an $8.1 billion cut in defense would result in a 10% loss in U.S. combat readiness, an unacceptable political risk.

Mitchell and House Speaker Tom Foley have vowed to pass a "clean" budget bill, unadorned by amendments, before Congress adjourns around Thanksgiving. A veto would leave the automatic cuts in force at least until next year, indiscriminately slicing muscle as well as fat from most Government programs.