Why Balanced-Budget Debate Stymies Senate

AMENDING the Constitution to require a balanced federal budget would be one of the United States' biggest leaps into the fiscal unknown since Alexander Hamilton was secretary of the treasury.

Supporters say a balanced-budget amendment would finally end the enormous deficits that now threaten the economic future of the country. Detractors say it could cripple popular government programs - or might simply be ignored.

Over the past 15 years, attempts to push such a measure through Congress have continually fallen just short of success. Feelings run high on both sides of the issue, which is one reason why this year's political dealing over the amendment has been so intense.

Sen. Charles Robb (D) of Virginia calls the amendment ``a bad idea whose time has come.'' Sen. Rick Santorum (R) of Pennsylvania, speaking for many of the amendment's die-hard backers, vows, ``It will pass. It is just a matter of when.''

The balanced-budget amendment for now is itself balancing on a knife edge in the Senate. Supporters at midday yesterday were still one vote shy of passage, and were desperately trying to cobble together some sort of concession that would attract a wavering senator.

Attention focused on Sen. Kent Conrad (D) of North Dakota, who has demanded that Social Security be protected from the amendment's effects, among other things. Though Republicans held out some hope of striking a compromise with Conrad, the North Dakotan himself sounded dubious. ``This is a profound difference that we have,'' he said yesterday morning.

Senate majority leader Bob Dole (R) of Kansas has adjourned the Senate and postponed a vote on the amendment until later today at the earliest. Even if the amendment fails to pass in this attempt, Mr. Dole indicated he would try to bring it up again.

``Let's leave it out there a year, and let's see what happens,'' he said.

Even if proponents manage to eke out victory in the Senate they will not have reached the end of the amendment's road. It must still be approved by the legislatures of three-quarters of the 50 states before it becomes part of the Constitution.

Passage in the states is far from assured. A number of nationwide surveys have suggested that at most 30 state legislatures will approve the amendment fairly easily. Backers will likely have to lobby hard to win the eight further state votes necessary for victory.

Ironically, 48 states themselves have statutory or constitutional balanced-budget requirements. And over time, these state limits work fairly well, says Philip Dearborn, director of government finance research at the US Advisory Commission on Inter-governmental Relations.

It is true that not all states balance their budgets every year, and that some years the budgets are balanced only through such techniques as delaying important payments or issuing bonds to finance red ink.

But the state requirements contribute to a mind-set among state and local officials that budgets should be balanced. ``The federal government operates under very different rules,'' which more easily accept deficit spending, says Mr. Dearborn.

It should not be surprising that in Washington the balanced-budget fight has come down to a struggle over Social Security. The old-age pension fund is the largest category in the federal budget, bigger by far than all defense spending, and thus balancing US spending without touching Social Security would be a difficult task.

Studies by the Congressional Budget Office and other sources indicate that if the balanced-budget amendment becomes law, and the GOP makes good on its tax cut pledges, some $1.4 trillion will have to be slashed from federal spending between now and the target implementation date of 2002.

Some Republicans insist these reductions can be made by simply slowing the projected rate of growth in federal spending, vigorous use of block grants, and reform in Medicare and Medicaid. But budget-balancing exercises by outside experts often involve Social Security cuts.

The Concord Coalition, the deficit hawk group co-chaired by former Sens. Paul Tsongas (D) of Massachusetts and Warren Rudman (R) of New Hampshire, proposes, for instance, increasing the Social Security retirement age - a move it figures could save $16 billion annually by the year 2001. Other suggestions include reductions in benefit increases, and curbs on benefits to wealthier retirees.

GOP congressional leaders have pledged to keep budget cutters away from Social Security through 2002, but opponents insist the program's big trust fund will become an irresistable target.

Some experts worry that, in the end, a balanced-budget amendment might become an empty gesture. ``I don't think it would be painful to every American if it becomes law,'' says Murray Weidenbaum, director of the Center for the Study of American Business. ``I assume a new cottage industry will develop in how to get around the restrictions of the amendment.''

Mr. Weidenbaum, a former Reagan-era GOP economic official, says that energy devoted to passage of the amendment might be misplaced.

``So many of the folks that are hot for the amendment are avoiding action they could take right now to reduce the deficit substantially,'' he says.