Capital echoes with first whack from Gramm-Rudman. Still to come: high court ruling, `summit' on budget

The budget-cutting axe of the Gramm-Rudman deficit reduction law took its historic first swing through hundreds of federal programs Saturday. Already under the gun to come up with a budget for fiscal 1987 that will avert a deeper budget chop in the fall, Congress arrives at work today uneasy about where the political chips may fly.

Contributing to the legislators' uncertainties:

Lawmakers feel increasing pressure to cushion politically sensitive programs from the full impact of Gramm-Rudman cuts. Lobbyists for veterans, retired federal employees, and senior citizens have been especially active on Capitol Hill over the past few weeks, urging legislators to protect programs that affect their groups. Representatives and senators have been receiving an increasing flow of mail from constituents on behalf of particular interests. The volume is expected to swell in the coming weeks.

The Gramm-Rudman deadlines are unavoidable, while the laborious process of hammering out a budget that will meet the law's deficit targets and stave off across-the-board budget cuts has hardly begun.

The idea of a ``summit'' meeting of administration officials and members of the House and Senate budget committees to resolve differences outside the normal budget-fashioning process apparently has gone nowhere. Concerns mount that Congress and White House will lock horns over defense spending and taxes, frittering away precious time needed to reach a budget compromise.

A constitutional challenge to Gramm-Rudman, partially upheld last month by a federal appeals court and awaiting review by the US Supreme Court, clouds the budget-cutting horizon. If, as many legal scholars and legislators expect, the court upholds the lower court's decision, cuts will not automatically take place in October the way they did last weekend. Instead, it will be up to Congress to come up with a budget that meets the Gramm-Rudman guidelines it overwhelmingly approved, and to reach agreement with the President on the cuts it provides.

Congressional leaders privately voice doubts that most lawmakers would have the nerve to pass such cuts only weeks before the fall elections.

Even if Congress did, Democratic leaders predict, the President would be likely to veto cuts in defense spending.

In this election year lawmakers will be especially reluctant to sacrifice programs without being able to tell voters they have received concessions in return. For many liberal Democrats championing education aid, federal housing subsidies, urban development grants, and other domestic programs, this would mean significant consessions on defense spending and, perhaps, an agreement on a tax increase from the Reagan administration as the price for congressional acceptance of the domestic trims.

In the event that Congress and the White House fail to make the tradeoffs necessary to compromise on the budget for fiscal 1987, which starts Oct. 1, congressional observers say the ensuing political chaos only weeks before the fall elections will mean bad news at the ballot box for many already-vulnerable incumbents. However, few lawmakers or congressional observers say Congress would dare backtrack on its commitment to dramatically reduce the federal deficit, even should that become possible.

``There's a difference between lack of happiness and lack of will,'' says Sen. Phil Gramm (R) of Texas, architect of the budget-balancing law, which dictates annual reductions in the federal deficit until a balanced budget is acheived in 1991. ``I detect a great deal of unhappiness [in Congress] about the choices that have to be made. But that unhappiness is a result of the necessity of generating the will to balance the budget.''

The central question is how much that unhappiness will increase through the year, as the unpleasant reality of approving large budget cuts registers among voters. Saturday's cuts -- at $11.7 billion roughly 6 percent of the projected deficit for fiscal 1986 -- are minor compared to the $20 billion to $40 billion in cuts likely to be required to bring the deficit to the fiscal '87 target of $144 billion. Without a budget agreement, and with the looming threat of a round of deep across-the-board cuts scheduled for Oct. 15, ``you're going to see all kinds of people scrambling to pass all kinds of bills,'' says Rep. Connie Mack (R) of Florida,

A harbinger of the sorts of things that may come, say lawmakers, took place late Thursday in the House, when Democrats and Republicans managed to derail legislation that would have cushioned the impact of Saturday's budget cuts on dairy price supports. Opponents of the bill were able to have the proposal struck from the legislative calender partly by arguing that other programs, such as federal housing subsidies, should receive special consideration along with the dairy situation.

Congress has until April 15 to produce an alternative budget to that submitted earlier this year by the President. Lawmakers say the course of events over the next few weeks will give a strong indication as to which way the winds may blow for the rest of the year.

There are some encouraging signs. Senate Budget Committee sources were predicting over the weekend that they might start writing their version of the budget in the next few days. House Budget Committee members say they are ahead of where they were at the same time last year. But the real test will come when the two houses of Congress try to find common budgetary ground between themselves -- and with the White House.

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