The budget-balance act -- a step-by-step boon or a cheap way out?
Will the Gramm-Rudman bill, which President Reagan signed into law last week, do more harm than good? One hopes not. Yet it still appears a cheap way out for a Congress either reluctant or simply unable to come to grips with the fiscal realities facing the United States in the latter half of the 1980s.
There is a gap of about $200 billion a year in what the government is spending and what it receives in taxes. Most of this gap was caused by the 25 percent individual income tax cut that took place over a three-year period. Part of it was caused by the large buildup of military spending during the first Reagan term. Both the tax cuts and the military spending were approved by large majorities of the Congress, with the endorsement of most Americans.
There is nothing to be gained now from dwelling on the inconsistency of the tax cuts along with increases in military spending.
But what has happened as a result has been a nibbling away at domestic spending to the point that Congress and the public say, ``No more.'' Mr. Reagan appears to think that more nibbling can be done, especially in ending specific government programs such as the Small Business Administration and subsidies to mass transit.
Congress has been unable to come closer to a balanced budget for three reasons. It has, at least until this year, felt it had to give Mr. Reagan most of what he asked for in defense. A bipartisan consensus has not wanted to curtail domestic spending any more. In fact, with just a slight shift in Congress, one may expect to see demands for substantially higher levels of domestic spending. And Congress has been reluctant to pass a tax increase that would face a Reagan veto.
So here comes Gramm-Rudman. If Congress and the President cannot agree on other means of reducing the deficit in five easy steps until 1991, this law will mandate across-the-board cuts in all government programs except social security, interest payments, and certain welfare-type payments to the poor. Sounds good so far, doesn't it?
But if you look at it, this means that roughly 40 percent of the budget will get all the cuts. Defense will stop going up and could actually go down. Is Mr. Reagan going to settle for this while he's still bargaining with the Soviets? Some middle-class programs may well get drained to the point of being ineffective. And Congress hears strongly from the middle class.
The President may think he can get more domestic cuts under the shadow of Gramm-Rudman. Congress probably thinks it can get its tax increase as the only logical way to keep the government in the various operations it is legitimately engaged in. Will the President accept the inevitable, then, and sign a tax increase in 1986? We will know by next summer.
Congress could unscramble Gramm-Rudman when it proves unworkable. Meanwhile, it may get through the 1986 elections with the appearance of having done something.
Indeed, Congress may have done something -- and something good. Only the future will tell. But having made this promise to the public to get the budget in balance in five years, it seems just a bit more likely that Congress will have the strength to do whatever it has to do, on either the spending or taxing side, to keep the budget moving toward balance. After 1988, a shake-up in Congress or the new president (of either party) could lessen the ideological clash between Congress and the Whit e House.
Politics as practiced in the United States is the art of getting from election to election. Congress may have gotten itself through 1986 with Gramm-Rudman. One hopes that Congress will still shoot for the general goal even if the specifics of Gramm-Rudman have to be ditched before 1991.