Key programs will fall under ax unless Congress lifts cost ceilings

Lost in the swirl of debate over balancing next year's budget is the fact that Congress faces urgent spending problems much closer at hand. Inflation has so bloated the cost of government that already Washington has pierced the spending ceiling decreed by Congress for the current fiscal year, ending Sept. 30.

As a result, a host of programs affecting both Americans and peoples overseas are starved for funds, as Congress debates what to do.

Last fall, in a binding resolution, Congress set a limit of $547.6 billion in outlays for fiscal 1980, projecting a deficit of $29.8 billion.

Legally, the federal government cannot spend more than that amount. Already, according to the Senate Budget Committee, actual and proposed outlays soar more than $16 billion above the ceiling.

Americans who get food stamps, miners eligible for black lung disability payments, workers hurt by foreign competition, and others will not receive money due them under existing programs, unless Congress raises the legal limit on 1980 spending.

"Any spending violation," said Alice M. Rivlin, director of the Congressional Budget Office (CBO) in a telephone interview, "is subject to a point of order."

No more money, in other words, can flow to existing programs, if any senator or representative invokes the ironclad ceiling approved by Congress last fall.

That is just what is happening, with programs like food stamps, aid to workers hurt by foreign competition, black lung disability payments, and foreign aid held hostage.

The list of frozen programs will lengthen, unless Congress either swings a budget ax to trim outlays or raises allowable spending totals.

Observers expect that in the end, Congress will increase the spending ceiling , since inflation requires higher outlays for a variety of existing programs.

Much of the problem stems from inflation, not from nefarious efforts by lawmakers to slip extra programs into the legislative mill.

Higher interest rates, notes Dr. Rivlin, are adding an extra $7 billion to the cost of servicing the national debt.

President Carter's grain embargo against the Soviet Union will raise government payments to American farmers by $2 billion to $3 billion, according to the CBO.

More expensive fuel prices alone will tack an additional $2.5 billion onto defense spending in fiscal 1980. Outlays to recipients of social security, food stamps, and other transfer payments are larger than expected, because of inflation.

Putting all this together, the Senate Budget Committee comes up within a projected deficit figure for fiscal 1980 of $45.2 billion.

Such a prospect disturbs lawmakers, at a time when they grapple with painful budget cuts to balance the fiscal 1981 budget. To many, a swollen 1980 deficit somehow does not square with trimming mightily to erase red ink from next year's spending.

To encompass the unavaoidable increase in costs, the chairmen of the Senate and House budget committees propose increasing the 1980 spending ceiling from $ 547.6 to $567 billion.

Both men promise to send a balanced 1981 budget to the floor, but contend there is no way out of the fiscal 1980 dilemma except to authorize larger outlays.

The higher ceiling has passed the House Budget Committee, but still is subject to hot debate within Senator Muskie's panel.