Congress under budget cloud. The huge budget deficit has wrought a historic change in Congress. When a tempting new program is proposed, the immediate question is: How're you going to pay for it?

Last December, the White House and Congress hammered out a two-year budget agreement. The tough battles over spending were supposed to be over - at least through the November elections. Last Friday, leaders of the House and Senate budget committees huddled in a Capitol conference room and tried to fill in a few missing details.

First, the House side put its offer on the table. Senate Budget Committee chairman Lawton Chiles (D) of Florida dismissed that proposal with an expletive.

Next, the Senate side countered with a plan of its own. House Budget Committee chairman William Gray III (D) of Pennsylvania rebuffed that proposition with quick retort.

The Senate panel's top Republican, Pete Domenici of New Mexico, stormed out of the meeting altogether.

The conference was forced to adjourn until next week, after the Senate returns from a week-long recess.

``They were calling this the year of the budget lullaby,'' observes Rep. Bill Gradison (R) of Ohio. ``Well, if this is a lullaby ... it was written by Bartok.''

Lawmakers are plugging their ears in anticipation of the discord to come. For the past few months, they have been making the unpalatable choices required to implement last year's budget agreement. But that plan required only a 20 percent reduction in the projected budget deficit over the course of two years, fiscal 1988 and 1989. ``That,'' says Sen. James Exon (D) of Nebraska, ``is baby stuff.''

The future, on the other hand, is something else. With an annual federal deficit weighing in at approximately $150 billion, an accumulated national debt of more than $2.6 trillion, and a public commitment to bring both down to size, Congress has its work cut out for it.

Technically, the law says that the budget must be balanced by the end of fiscal 1992. In reality, virtually no one believes that timetable can be met.

``This problem is going to be with us through the year 2000,'' says Rep. Leon Panetta (D) of California, who is expected to become chairman of the House Budget Committee when Representative Gray's four-year term expires in January. ``There will be no easy solutions.''

But there is plenty of political incentive to reduce the deficit anyway. For one thing, the Gramm-Rudman balanced budget law mandates steadily shrinking deficits.

While Gramm-Rudman's strictures have been eased once and will likely be modified again, few lawmakers are ready to dispense with the law altogether. Moreover, public pressure requires every legislator to, at least, pay lip service to the idea of fiscal responsibility.

``There's a sea change out there,'' says Rep. Buddy MacKay (D) of Florida. ``Members of Congress recognize that these deficits have to be tamed. Otherwise there will be a political penalty.''

Consequently, Congress is certain to operate in a fiscal straitjacket for years to come. That fact has already affected a subtle yet profound transformation in the way most lawmakers approach their job.

``When someone wants to start a new program, the first question you ask is not whether it's a good idea. The first question you ask is, `How are you going to pay for it?''' says Gray.

Exults Sen. Phil Gramm (R) of Texas: ``Gramm-Rudman has transformed the culture of this place.'' There is plenty of evidence to support Senator Gramm's contention. Once, new federal programs were adopted with little regard to their cost.

When the House and Senate budget committees met to put together a spending blueprint, conflicts were easily resolved, recalls Representative Gradison. ``If there were two different numbers for any program, we'd just take the higher number.''

Today, such conferences are characterized by almost excruciating negotiations.

Last Friday's contretemps was triggered by a disagreement over funding for space and science programs, despite the fact that the two sides had reached agreement on almost everything else. The House and Senate positions differed by about $250 billion - a fraction of a percent of the $190.2 billion allotted to domestic programs in fiscal year 1989, which begins Oct. 1, 1988.

Likewise, it was nearly considered an act of apostasy for a House member to challenge a spending bill after it had emerged from the Appropriations Committee.

But last year, senior appropriators were driven to distraction by a self-styled ``meat-axe'' group of legislators that attempted to impose a 10 percent across-the-board reduction on all spending bills coming out of committee.

Even more galling to the appropriators, the meat-axe group occasionally succeeded in winning a House majority. ``Some folks just don't appreciate the work that goes into these bills,'' grumbled the Appropriations Committee's venerable chairman, Jamie Whitten (D) of Mississippi, at the time.

Similarly, spending proposals that might have flown through the Congress are now subjected to the sort of scrutiny unheard of just a few years ago. For example, the 15-year-old federal revenue-sharing program, which provided federal funds to cities and towns, fell to the budget knife when its annual reauthorization came up in 1986.

Still other proposed programs are carefully packaged with suggested spending cuts or tax increases to pay for them. The trade bill passed by Congress last week would impose a small import fee to help finance retraining programs for workers who lost their jobs to imports. Day care and other costs in the House and Senate welfare reform bills would be met in part by minor adjustments in the income tax code.

Reinforcing this trend is an apparent jump in the public's deficit consciousness. In 1986 Missouri Republican Jack Buechner defeated a 20-year House veteran who chaired a public works subcommittee.

Though the incumbent, Democrat Bob Young, trumpeted his considerable success at bringing home ``pork barrel'' projects, Mr. Buechner was able to triumph, he says, by painting his opponent ``as part of the problem.''

When Rep. Edward Feighan goes home to campaign in his suburban Cleveland district, ``I don't talk about the bridges I helped get built,'' he says. ``I campaign against the budget deficit. I campaign against the trade deficit. I basically,'' the Ohio Democrat jests, ``campaign as a Republican.''

For all the changes, however, some things remain the same, leaving more than a few members of Congress despairing of the prospects for deficit reduction.

``Everyone wants to see the budget balanced, but they want to see it balanced on someone else's priorities,'' says Rep. John Porter (R) of Illinois. For example, last week's budget confrontation centered in part on Senator Chiles's desire to spend more money on space sciences - an activity of importance to Florida - and Representative Gray's attempt to channel more funds to the anti-poverty programs that benefit urban districts such as his own.

Lawmakers note that, even after a 500-point plunge in the stock market last October, it took the nation's elected officials nearly two months to come together on a deficit-reducing plan about which most of the people who helped fashion it expressed dissapointment.

``It just shows you how little progress can be made, even with the most unbelievable pressure on you,'' laments Sen. Bob Packwood (R) of Oregon.

Earlier this year, lawmakers adopted the White House's conspicuously optimistic economic assumptions when it became clear that the estimates produced by the nonpartisan Congressional Budget Office predicted that the actual deficit would exceed the amount promised by December's budget agreement. ``We still play games with the numbers,'' says Gradison.

A bipartisan commission has been charged with devising a bipartisan solution to the deficit crisis. The panel, patterned after the 1985 commission that crafted a compromise for bolstering the Social Security system, is supposed to finish its report in early 1989. The report could include any number of suggested changes, including a proposal to overhaul the much-maligned process by which Congress and White House agree on how much the federal government spends and taxes every year.

``It'll provide cover - everyone will be able to sign onto a package of unpopular proposals that leads to a popular result,'' says Representative Panetta. ``Of course, no matter what you have - balanced budget amendment, commission, whatever - you've got to be willing to cast the bottom-line vote.''

Next Friday: PACs and the Congress

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