TEARING INTO THE DEFICIT

By GEORGE J. CHURCH

Can it really be happening? For more than 30 years politicians have been calling for a balanced budget, as something it might be nice to have someday, if it could be done without hurting anybody. Such oratory, it has long been understood, is the accepted substitute for actually doing anything to bring federal spending back into line with revenues. But to set a hard date, fiscal year 2002, for cutting deficits all the way down to zero? And put real numbers on the table -- as much as $1.4 trillion less spending over the next seven years? And make specific suggestions about where the money should come from, including a hit list of 284 federal agencies and programs to be legislated out of existence? It seems hard to take seriously.

But the Republicans who control Congress are dead serious. In record time last week, they rammed through resolutions containing all these proposals in the House and Senate Budget Committees. The resolutions are likely to be approved by floor votes in both chambers this week. Moreover, contrary to the conventional wisdom of decades, which held that government spending could never be reined in enough to wipe out deficits because too many citizens would be outraged by losing federal help, many of the G.O.P. ideas stand an excellent chance of actually taking effect.

Remarkably, only a few weeks ago, congressional Republican leaders were still cautiously talking about putting America on a "glide path" to a balanced budget and making a "down payment" toward that goal. But the defeat of their balanced-budget amendment, along with some goading by Democrats, steeled them to pursue the battle by other means. "The change in the temperament of the people seems to make it easier than reducing the deficit in the past has ever been. It's a lot different," says an elated Pete Domenici, the Senate Budget Committee chairman. "I find it much easier to lead, much easier to get Senators to concur that we no longer have the luxury of fiddling around the edges."

There will be chances to revert back to that mode, of course. Budget resolutions only set broad dollar targets for federal spending and revenues. Other committees and then both houses must vote the actual appropriations, and eventually a mammoth "reconciliation" bill must be signed by President Clinton, or passed over his veto. During the months of wrangling to come, some proposals will surely be modified. The House g.o.p. may not get as big a tax cut on upper incomes as it wants, since its $340 billion tax-cut package means it will have to cut at least that much more in spending. Proposals to cut back Medicare and Medicaid, already the flash point of attack, may be softened. "We're going to focus on their vulnerabilities," says California's Vic Fazio, a member of the House Democratic leadership. "The average American will reject it."

But quite likely the Republicans will achieve a more severe shrinkage in the size and pervasiveness of the Federal Government than anyone would have dared predict even a year ago. John Kasich, the whirlwind of motion and emotion from Ohio who heads the House Budget Committee, repeatedly proclaims his work to be "a revolution." And for once that overworked clicha might be true. Consider two measures of how many decades of precedent the Republicans intend to reverse. The Senate G.O.P. wants to zero out the Department of Commerce; Kasich's House troops would also wipe out the Departments of Education and Energy. Either move would shrink the number of Cabinet departments for the first time in 48 years.

At committee hearings last week, Kasich wore an Elvis Presley tie to symbolize the length of time since the last balanced budget -- in 1969, when Elvis was still the King and the government took in $3.2 billion more than it spent. And that was an aberration: spending has exceeded revenues in 34 of the past 35 years-though the red ink did not become truly frightening until excessive tax cuts and accelerated defense spending were enacted during Ronald Reagan's presidency.

Like most revolutions, the one Kasich and Domenici aim at will not be accomplished without savage battles. The Democrats launched a withering barrage against the proposals even before they were fully spelled out. Reporters filing into the White House briefing room for the start of two days of oratory from top Administration officials found the theme enunciated even before the speechmaking started. A chart on an easel bore the headline cutting medicare to pay for tax cuts for the wealthy. Cabinet secretaries, economic officials and most of all White House Chief of Staff Leon Panetta banged away relentlessly; they criticized other proposals, such as a reduction in funding for Head Start, almost parenthetically. Democratic pollster Stan Greenberg, recalling the hammering Republicans took earlier for proposing less generous funding of school lunches, described the Medicare issue as "school lunch times ten."

Republicans are sufficiently worried about being "school-lunched" (they have made the expression a hyphenated participle) that Kasich pleaded with reporters not even to use the word cuts in describing his Medicare proposals. While the House Budget Committee would reduce Medicare and Medicaid expenditures by $480 billion over the next seven years (the Senate figure is $454 billion), these would be cuts in planned expenditures only. Actual dollars spent would still rise every year-just not as much as they would under the current budget. Moreover, nearly all analysts believe Medicare spending is rising at an unsustainable rate, and will have to be reined in, tax cuts or no. Senate Republicans have suggested a bipartisan commission to identify how to make those savings and twitted the White House for partisanship in refusing to join up-though the g.o.p. is also playing politics by trying to get Democrats to share the blame.

The Republicans also have their impressively sweeping plan. While its spending reductions would fall heavily on education and infrastructure, they range over hundreds of organizations and programs. Some are long established, like the Interstate Commerce Commission, formed in 1887 to regulate the railroads; others are newly minted, like the Christa McAuliffe scholarships, named for the schoolteacher who died in the explosion of the Challenger space shuttle in 1986. Some programs are well known, like the National Endowment for the Arts; some are huge, like farm-price subsidies; some are both, like veterans' benefits.

Not even the holiest of all sacred cows, Social Security, would get off untouched. Though they proposed no cuts labeled as such, the Republicans did include in their plans an allowance for changes in the way the Consumer Price Index is calculated. That would reduce future cost-of-living increases in Social Security pensions and other programs. Many economists believe the cpi, as presently figured, overstates the extent of inflation and makes cost-of-living increases more generous than they should be. The Bureau of Labor Statistics, which calculates the index, is expected to make a change that the House plan counts on for $52 billion in additional revenue and the Senate plan for $17.3 billion.

The Administration and its congressional allies for the moment have no alternative to offer. "We don't have an obligation to put out another budget," says Alice Rivlin, director of Clinton's Office of Management and Budget. "We have a budget on the table." True enough: it foresees deficits rising to $276 billion or more by the year 2000. As a result, the President took heat from centrist Democrats, who believe Clinton leaves himself vulnerable to being portrayed as the defender of the status quo. "The G.O.P. plan deserves a mixed grade,'' says Rob Shapiro of the Progressive Policy Institute, pointing out that the Republican plan was still larded with pork such as $4.5 billion in tax breaks for companies producing ethanol, a boon for G.O.P. contributor Archer Daniels Midland. "But the opposition didn't show up," Shapiro adds. "The onus is now on the White House."

Public opinion seems to be swinging behind the budget cutters. In a TIME/CNN poll taken by Yankelovich Partners last week, people heavily favored the general idea of balancing the budget, and 47% opted for doing so within seven years, "in part by cutting spending on popular programs such as Medicare and farm subsidies." Only 36% would rather "protect popular programs but continue to run large annual deficits." There were the contradictions: only 9% thought "the elderly should be exempt" from budget cuts-but 81% wanted to prevent "significant cuts" in Medicare, while only 16% favored them. On the whole, though, the poll made cheerier reading for the G.O.P. than for Clinton.

Surprisingly, aides with Clinton in Russia last week took a notably milder line than Panetta back in Washington. Spokesman Mike McCurry said Clinton "has been very adamant about being respectful of the work that the Republicans have done ... After lots of parry and thrust" there would be a budget with "some combination of the President's priorities and the Congress's priorities."

Which was as close as anyone came to the word compromise. In his official proposals, Domenici accepted Clinton's proposal for a slight reduction in defense (Kasich's House committee posited a small increase). But in an almost unnoticed "hypothetical" scenario, Domenici illustrated the effects of reducing defense spending to $226 billion a year by 2002, vs. about $270 billion currently. Presto! Projected spending for Medicare and Medicaid would have to be reduced only by two-thirds as much as in the official proposal.

Domenici's budget also contains no immediate tax cuts. Some of the most dedicated deficit hawks, such as Pete Peterson, former Secretary of Commerce, consider those already passed by the House to be "irrational." Billy Tauzin of Louisiana, leader of 22 conservative House Democrats, predicts that at some point an alternative budget without tax cuts will be offered and that many of his compatriots will vote for it. But would they outnumber the right-wing Republicans who consider cutting taxes an even holier goal?

The presidential race will have an influence as well. Will candidate Bob Dole support the Senate plan or aim to please conservatives by pushing for tax cuts? "All I know," says Domenici, "is that he had kind words to say about me and what a great job I've done." But Dole can't allow himself to be outflanked by tax-cutting candidate Phil Gramm, who declared last week, "The Lord is with me. The American people are with me. It's these Senators I gotta get." In the end, Dole and Domenici are likely to embrace at least some tax cuts to go along with deep cuts in spending- and it's not out of the question that Clinton will as well. Overall, though, the deficit will probably be reduced substantially.

For many people, budget balance is a moral issue. In their view it is just plain wrong for the government to keep spending more than it takes in and handing the bill to future generations. More practically, the gargantuan deficits that have pushed the national debt to $4.8 trillion have also saddled it with $235 billion in interest that must be paid this year. Without cuts, the payments are expected to hit $308 billion annually by the year 2000, a staggering amount to ask taxpayers to fork over for nothing but debt science.

Consequently, hardly anyone will argue against the idea of a balanced budget -- presumably not Clinton, who early in the 1992 campaign promised to produce one within five years. But how soon to get there, by what policies and how much pain-those are subjects of raging, and legitimate, debate. Moreover, that debate brings up the question of how big a government the people want. By proposing a balanced budget, not as a vague future goal to be given lip service but as a hard target to be reached in a specific year by specific means, the Republicans are at last forcing the nation to confront questions that have been avoided for too long.

--Reported by Jeffrey H. Birnbaum, John F. Dickerson, Suneel Ratan and Karen Tumulty/Washington, and James Carney with Clinton in Russia

With reporting by JEFFREY H. BIRMBAUM, JOHN F. DICKERSON, SUNEEL RATAN AND KAREN TUMULTY/WASHINGTON, AND JAMES CARNEY WITH CLINTON IN RUSSIA