Back to budget basics

THE anticipated rejection of a key portion of the Gramm-Rudman deficit-reduction act by the Supreme Court of the United States now brings the budget-balancing process back to where it has belonged all along: Congress, working in tandem with the White House. Unfortunately, for all the semblance of ``action'' now taking place in Washington, neither side has yet to muster the resolve needed to bring the deficits under control. Deficits continue unabated -- casting a shadow on an economy that appears stalled. Unemployment remains at high levels. Manufacturing jobs are in decline. The housing market looks strong, but few other parts of the economy show as much zip. And the trade imbalance continues. Hence back to the budget and Gramm-Rudman. The economy is not growing fast enough to generate the new tax receipts required to bring down the deficit. But Washington has known all along the hard choices required to reduce the deficit: Cut programs, or raise taxes, or both.

Sen. Phil Gramm said, upon learning of the leaks by ABC News of the high court's expected decision, that Congress could enact amendments that would likely satisfy a future court test.

But the Gramm-Rudman approach -- requiring that the deficit be eliminated by 1991 through automatic spending cuts -- itself remains unsatisfactory.

Senate budget negotiators, for their part, have been attempting to prod the White House, and the House of Representatives, into accepting modest tax increases. The House has been wary of the tax hike. Meantime, in both Senate and House, tax writers have produced tax reform plans that would substantially increase tax receipts the first year of reform -- thus helping to offset the deficit.

Isn't that the way to go? To reduce the deficit, revenues must grow and programs must be carefully pruned, not treating all federal programs, including defense, as equal (because they are not equal) but making choices based on distinctions.

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