Congress is closer to sending deficit bill to White House

Congress is preparing to slam the political ball back into the President's court on deficit reduction. Both houses this week are expected to approve a compromise measure to mandate a balanced budget within five years. The agreement, reached by House and Senate negotiators late last week, finally gives lawmakers an escape from the long, embarrassing dilemma over rising federal deficits.

The proposal promises to slash deficits to meet targets each year, or else trigger automatic spending cuts in many government functions as early as next March.

With enactment of the balanced-budget plan, the next move will be up to President Reagan, who presents his fiscal 1987 budget in January.

Congressional leaders are clearly skeptical that the administration can write a budget that includes defense increases that Mr. Reagan favors without tax hikes that he vehemently opposes.

``A lot of things are sort of closing in on the White House,'' said Senate majority leader Robert Dole yesterday on NBC's ``Meet the Press.'' The Reagan administration has been pushing for deficit cuts, said the Kansas Republican, adding, ``Right now the moment of truth is about to arrive.''

Bob Packwood (R) of Oregon, chairman of the Senate Finance Committee, said that if the President insists on a 3 percent growth for defense, then 30 to 50 federal programs would have to be dismantled unless taxes were raised.

Majority leader Dole said Sunday that there was ``no way'' that Congress would go along with eliminating so many programs.

Treasury Secretary James A. Baker III says many of the spending cuts the administration may propose in its 1987 budget could be items the President submitted previously and Congress rejected. ``If at first you don't succeed, try, try again,'' he notes.

The clear implication from congressional leaders is that they will not go along with big defense increases. While almost no one is willing to lead the charge for tax increases, some members of both parties say they hope the balanced-budget crunch will convince Reagan to support new taxes.

For its part, the Reagan administration has long endorsed the balanced-budget proposal. But Reagan officials have also stood by their plans for defense increases. Many on Capitol Hill see the two positions as contradictory.

While the balanced-budget law resolves problems with the budget process on Capitol Hill, it does not yet mean agreement in Washington over how to reduce deficits. Many of the central struggles over priorities remain unresolved and passage of a law that can be repealed later or overturned as unconstitutional does not guarantee a balanced budget.

The proposed law is generally known as the Gramm-Rudman bill for its original cosponsors Sens. Phil Gramm (R) of Texas and Warren B. Rudman (R) of New Hampshire.

Among the principal requirements of the legislation:

A balanced budget would be required by fiscal 1991, which begins Oct. 1, 1990. Deficit targets would be $144 billion in 1987 and go down by $36 billion each year until 1991. (The current year's deficit is forecast at close to $200 billion.) If estimates show a deficit of more than $10 billion above the target in any given year, Congress must either make more cuts or else the president must make automatic cuts in certain programs.

Unless Congress can reduce this fiscal year's deficit by March 1, automatic cuts of up to $11.6 billion will be made in federal programs. The White House has won an agreement for more flexibility in making cuts in defense for 1986.

Social security, seven antipoverty programs, and veterans pensions would be exempt from automatic cuts. If the automatic reductions go into effect, half would be taken from defense and half from nondefense spending.

If the country falls into an economic slump, the requirements for reducing the deficit would be eased. A slump would be defined as two successive quarters in which growth was 1 percent or lower.

A speedy review by federal courts is required to determine the law's constitutionality. Scholars have raised questions about whether the measure would change the balance of power between the branches of government.

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