Congress Gets Ready To Grapple With Deficit

Balanced-budget amendment appears likely to pass soon

IT'S becoming more certain that Congress, frustrated by the deep deficit, will vote in a balanced-budget amendment to the Constitution in the next few weeks.

House leaders and other key players are now negotiating over possible companion legislation over how to actually balance the budget.

Some lawmakers, such as House Budget Committee chairman Leon Panetta (D) of California and House majority leader Richard Gephardt (D) of Missouri, are seeking ways to tie the vote on the constitutional amendment to a vote on automatic spending cuts and tax increases to achieve the balance.

Their goal is to force up front some of the hard political choices over which spending is cut and whose taxes are raised that Congress has not yet been able to make.

To the main sponsor of the amendment bill, Rep. Charles Stenholm (D) of Texas, the efforts to link enforcement legislation to the amendment vote amount to an effort to defeat it.

The balanced-budget amendment alone certainly would have some effect on reducing budget deficits. The moral authority of a constitutional amendment would raise the pressure on federal politicians to make hard choices, presumably. And failure to abide by the amendment could draw the courts into the budgetmaking arena in unprecedented and unpredictable ways.

But recent history does not offer much promise for trying to force budget limits with general rules and automatic procedures. The Gramm-Rudman-Hollings deficit-reduction act of 1985 failed to cut the deficit at all and has been abandoned.

"You cannot substitute automatic procedures for political will," says Stanley Collender, a federal budget expert with the Price Waterhouse accounting firm. Mr. Collender compares the budget amendment's prospects to Prohibition, where the Constitution was put so at odds with general practice that the amendment had to be repealed.

In the case of the budget amendment, Congress and the White House both have long histories of finding ways around fiscal disciplines. "I can come up with a hundred ways of beating this thing," says Collender, "and I'm not even thinking about it full time."

Most budget watchers agree that a balanced-budget amendment - for all its high constitutional tone - won't restrain clever, highly motivated deficit spenders in the federal government.

"If it were placed in the [United States] Constitution, it would lead to evasions," says Allen Schick, a budget expert at the University of Maryland and the Brookings Institution. "It would also have some impact. The evasions will not make it negligible."

"Each time we are effective in passing a new process, a new way of preventing the deficit from growing, we create new ways to get around it," says Paul Leonard, senior analyst at the liberal Center for Budget and Policy Priorities. But circumventing the controls will be more difficult than before, he adds, "so some marginal discipline is added to the process."

The balanced-budget amendment will have to pass each house of Congress by two-thirds majorities. It then has seven years to win ratification by three-fourths of the states. The House came within seven votes of passing an amendment in 1990. Few doubts remain that it will pass it easily this time. The reasons: frustration over record deficits approaching $400 billion, fear of the scorn voters are heaping on Congress for its inability to take meaningful action, and the weakness of the leadership that has op posed the amendment.

The Senate actually passed an amendment in 1982 and has come within a few votes of doing so twice since. Its action is somewhat less predictable this round than is the House vote, but support there is strong.

As for the states, most close observers expect them to ratify the amendment quickly, well ahead of their seven-year limit.

Two similar bills to amend the Constitution each have broad support in the House and Senate, respectively. Each would require a balanced budget to take effect the second year after ratification. To override that limit would require 60 percent of the full membership of each chamber. To raise taxes would require a majority of the full membership, as opposed to the usual majority of those voting.

The Senate bill, introduced by Paul Simon (D) of Illinois, states simply that outlays cannot exceed receipts. How that would take effect is not clear. At its most abrupt, it could mean that at the point in a fiscal year when spending outruns revenue, spending stops.

The Stenholm bill in the House requires that the budget be balanced at the beginning of the year based on projections.

Many ideas are floating around Capitol Hill this week for companion legislation that brings the budget into balance. One prominent formula is automatic deficit cuts that, when triggered, mix two parts spending cuts and one part tax increases. These formulas are very much in flux, however, in House leadership meetings.

Passing this enforcement legislation will be much more difficult than voting for a balanced-budget amendment and could take months or years, notes Collender.

Conservatives are concerned that the amendment may lead to more taxes. "Liberals are using the balanced-budget amendment as a cover for a tax increase," says Dave Mason, a Congress analyst at the Heritage Foundation.

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