U.S. Begins Enforcement of Balanced Budget Law

The government took the first historic step toward painful enforcement of the Gramm-Rudman balanced budget law today, estimating that $11.7 billion must be cut by March 1 in almost everything from the Pentagon to the Postal Service.

The overall military budget will be reduced $5.8 billion, under the estimates from the Administration’s Office of Management and Budget and the Congressional Budget Office. The other half of the cuts will come from the rest of government, with the notable exception of Social Security and a number of programs for the poor.

The two budget agencies estimated that the deficit for fiscal 1986, which began last October, will be $220 billion if no cuts are made. That is higher than previous estimates and more than enough to trigger the cuts under the Gramm-Rudman balanced budget law.

That statute, passed in the waning days of Congress’ 1985 session, requires the deficit to be reduced in steps until it is eliminated in 1991. Under a special provision, the maximum that can be cut this fiscal year is $11.7 billion.

4.9% Cut in Military

The fiscal 1986 cuts call for a 4.3% reduction in most agencies and a 4.9% cut in the military.

Salaries of federal employees will not be cut, but the operating budgets of their agencies will fall under the knife. Budget Director James C. Miller III said there will probably not be any layoffs of federal workers, though there could be a hiring freeze.

The CBO and OMB figures showed a $62-million cut in Congress’ own budget, a $4-million slash at the office of the President, $665,000 from the CBO itself and $1.5 million from the OMB.

The across-the-board nature of the cuts means that even agencies that raise money, like the Internal Revenue Service, will be cut. The IRS will lose $140 million from its $3.2-billion budget.

In Agriculture, the required $1.3-billion cut will mean smaller payments to farmers and a reduction of the number of inspectors at meat-processing plants, officials said.

Cut in Student Aid

The OMB-CBO report estimates a $168-million cut in spending authority for the Employment and Training Administration of the Department of Labor, a $229.7-million cut in student aid and a $40.4- million cut in the federal vocational and adult education program.

Funds for the National Endowment for the Arts will be cut by $7.1 million and by $6 million for the National Endowment for the Humanities.

Spending authority for the Department of Housing and Urban Development will be cut $645 million under the Gramm-Rudman formula.