Now, the Real Budget Battle Commences

THE federal government reopened yesterday. Congress and the White House both declared victory as the immediate crisis of governance was put to rest. But hardly anything on the budget has been solved.

Like many things in Washington, the squabble was two parts flash and one part substance. If the two sides were rival street gangs, this would have been a skirmish over where and when to have the big rumble. Yes, the Republicans got President Clinton to agree to a seven-year time line for balancing the budget.

Yes, they got the president to use their numbers, the budget projections put out by the Congressional Budget Office (CBO). And yes, Mr. Clinton got a vague commitment in the two-paragraph agreement that those CBO figures would be reviewed by his own number-crunchers at the Office and Management Budget.

The president also won an equally vague provision that the next budget ''must protect future generations, insure Medicare solvency, reform welfare, and provide adequate funding for Medicaid, education, agriculture, national defense, veterans, and the environment.''

But the interim funding accord left unresolved the substance of those tough issues.

''It's basically an agreement to disagree,'' says Stanley Collender, chief budget analyst for Price Waterhouse.

This weekend's agreement, in essence, funds government operations until Dec. 15, which gives Congress and the White House another month to finalize a balanced-budget bill as well as to agree on eight more appropriations bills.

If they don't make it, the government could shut down again. But chances are the next shutdown would be less severe. As the president signs each appropriations bill, more government agencies become exempt from the squabble.

The red meat here is the massive balanced-budget, or ''reconciliation'' bill. By controlling Medicare, welfare, and taxes, this bill, in its final form, will answer a fundamental question: How big should the federal government be, and what role should it play in the lives of Americans?

Although this legislation is the really big rumble mentioned earlier, it is, ironically, the only bill that can go unsigned without shutting down the government. As a result, some observers suggest, this debate could go unresolved far past December and could eventually turn the November elections into a giant referendum on the specifics of the balanced budget.

According to Mr. Collender, if serious negotiations are under way in December, Congress and the president may be able to sign everything and be done with it.

''But if people have retreated to different corners and are snarling at each other,'' Collender says, there won't be an agreement anytime soon.

So did 800,000 federal workers take a six-day vacation for nothing? Collender says yes.

But Bill Frenzel, a former Republican congressman from Minnesota and now a scholar at the Washington-based Brookings Institution, says not exactly.

''This was the first hurdle in the race between the executive and the legislative branch in the struggle to put a stronger imprint on the new budget,'' he says. ''It delineated the extremities of what the budget will be.''

Frenzel explains that the framers themselves designed this to be a divided government, in which problems would be solved by the inertia of conflict. It's a process that, at times, ''gets a little messy.''

Unlike past government shutdowns, such as the ones that occurred under Presidents Reagan and Bush in 1987 and 1990, he says, the changes under discussion are quite large and fundamental, and the arguments are correspondingly significant.

''People who don't understand that there's conflict in government don't know why they voted for Democrats or Republicans,'' he says. ''That's politics.''

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