Castor Oil and Catnip

A few months ago Congress and the White House threw up their hands over trying to reach a balanced budget someday--and down came Gramm-Rudman. Gramm-Rudman is the gimmick legislation that holds out the promise of achieving a balanced budget by 1991. It is a combination of castor oil and political catnip achieved through theoretical $36-billion annual bites out of the deficit.

The bitter part of it will force on Congress and the White House some of the discipline needed to put $200 billion-a-year budget deficits on the decline. The narcotic effect comes from the ability to tell voters, “We are doing something about the deficit.” Call it the Political Protectionism Act of 1985.

Various members of Congress think that Gramm-Rudman will do many things. Some believe that it is a way to force the White House to accept a tax increase, by trickery if nothing else. Others see it as a way to get more cuts in the defense buildup while protecting vital domestic programs. And the White House hopes that the measure will put backbone into its campaign for more domestic cuts with no new taxes. Clearly, not all those desires can be fulfilled.

It is difficult to find, as well, anyone in Congress or at the White House who does not have some problem with Gramm-Rudman. Many people dislike the concept of imposing arbitrary budget cuts. These people have the old-fashioned notion that Congress should determine national needs and then find the money to finance them. And there are constitutional problems with the Gramm-Rudman approach. If Congress cannot agree on how to cut the budget by the required amount, the White House would assume extraordinary powers to do so. Then, if Congress and the White House could not concur, across-the-board reductions would be imposed or taxes would have to be raised.

In spite of all the uncertainties, Gramm-Rudman has become an irresistible political force. There is little doubt now that it will pass Congress in the next few days and be signed into law. That, it appears, is the only action that will dissolve the impasse over raising the national-debt limit beyond the $2-trillion mark. The ceiling must be lifted by the end of this week or the Treasury Department promises to stop spending money.

Given that reality, what can we expect life to be like under Gramm-Rudman? Let’s look for the silver lining and say that it may be no worse than without it. Congress would make some domestic cuts, but not agree to the gutting of scores of domestic programs. The White House probably would go along with some more slowdown in defense spending, reluctantly. Then, falling perhaps $10 billion or so short of the limit, everyone could consent to a modest tax increase thinly disguised as something else (it will be an election year, after all). Gramm-Rudman will allow everyone to blame someone else.

In other words, Washington probably will do just about what it would have done without Gramm-Rudman: muddle through. This is not the way to budget a country’s expenses, but right now it is the only game in town.