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Budget bill moves; tax reform falters

(Page 2 of 2)

Sen. Daniel Patrick Moynihan (D) of New York proclaimed the Gramm-Rudman-Hollings plan a ``suicide pact.'' He told colleagues, ``We are entering an agreement to dismantle the defenses of the United States.''

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Skeptics divide between those who argue that the plan will make too many cuts and those who say it will be ineffective.

As written, the plan promises to slash the federal deficits between now and fiscal 1991.

Some programs, including social security, would be protected, but others, including defense, would take severe across-the-board cuts if the plan is enforced.

Probably the most stringent critic is Rep. Henry A. Waxman (D) of California, a liberal who charges that ``it's a mindless idea'' that will result in making cuts automatically in spending programs, instead of setting logical priorities for cutting.

Packwood concedes the new process is not ideal but calls the measure necessary because of congressional failure to control spending. ``I pray that what we are about to undertake will work.''

Even as the balanced-budget measure passes Congress, opponents are preparing to overturn it in court. Alan Morrison, a lawyer who successfully challenged the practice of a legislative veto, is already preparing a case.

Legal authorities agree that the bill could be vulnerable to a charge that it transfers congressional power over government spending to the executive department.

At issue is the procedure by which the president would be empowered to make automatic spending cuts. Major provisions of budget-balancing bill

Under Gramm-Rudman, deficits must shrink by $36 billion a year, reaching zero in fiscal 1991. Failure to hit the deficit targets would trigger automatic spending cuts in federal programs as follows:

Exempt. No automatic cuts would be permitted in social security, interest on the national debt, or eight low-income programs including medicaid, Aid to Families with Dependent Children, veterans compensation, and veterans pensions.

Limited protection. Programs that would be subject to some cuts include foster care and adoption assistance, unemployment, child support enforcement, student loans, and crop supports.

Health programs. Automatic cuts would be limited to 1 percent in 1986 and 2 percent thereafter in medicare, community health, and health programs for veterans, Indians, and migrants.

Other nondefense programs would be cut across the board. Defense programs would be cut an equal amount, but President Reagan would have limited flexibility in choosing where to make defense cuts in 1986. He could also transfer defense funds to preserve the full strength and pay for uniformed military personnel.

The timetable for the cuts would be:

Automatic cuts would probably start March 1 of next year; cuts of $11.7 billion are predicted. Estimates of the current budget deficit show it well above the $171.9 billion target set for 1986.

Automatic cuts for 1987 would come, if triggered, on Oct. 1, 1986. Those cuts could be extensive, since the Gramm-Rudman bill calls for a deficit of $144 billion in 1987, estimates already exceed that target by a wide margin. (Cuts would not be required if the deficit is within $10 billion of the target.)

Congress could suspend the balanced-budget requirements if the economy dips into recession.