Gramm-Rudman Trio Unfazed : Budget Ax Sponsors See Fear as Forcing an Accord

Their landmark budget-balancing law, barely a month old, threatens to throw the federal government into fiscal chaos, but the unlikely three senators who sponsored the law are expressing no regrets.

In fact, none of the three--Phil Gramm (R-Tex.), Warren B. Rudman (R-N.H.) and Ernest F. Hollings (D-S.C.)--expect the law’s most painful automatic spending cuts ever to be necessary.

Instead, they predict that the frightening prospect of those sweeping reductions across half the federal budget will force President Reagan and Congress finally to sit down and hammer out a more judicious deficit-reduction plan that will meet the law’s goals of balancing the budget by fiscal 1991.

“All of us are clearly in agreement, not only in our intention but our belief, that the President and Congress will do their duty,” Gramm said.

“There’s too much at stake; too many players around the table have too many chips piled up in front of them . . . “ Rudman agreed. “It will force action. It will force compromise.”

However, in a disagreement symptomatic of the difficulties that lie ahead, the three part company in describing what that compromise should contain.

The staunchly conservative Gramm, a Democrat-turned-Republican, insists that a balanced budget can be achieved by slashing domestic programs without violating Reagan’s pledge not to raise taxes. In addition, he supports Reagan’s proposed 3% after-inflation increase in defense spending for next year.

Hollings, on the other hand, adamantly insists that taxes must be a key element of deficit reduction: “I don’t see how you can do it without revenues.” Also, as a long-time critic of military spending practices, Hollings has shown little sympathy for what he describes as Defense Department “caterwauling” over proposals to curb its budget.

And Rudman predicts a budget that trims domestic programs, gives Reagan “some of what he wishes in terms of a defense increase” and “may well have some sort of revenue (increase).”

Initial Cuts Due March 1

Preparations for the first round of automatic spending cuts--a relatively mild $11.7 billion effective March 1--are already under way. What Gramm, Rudman, Hollings and almost all of their congressional colleagues hope to avert is the second round: more than $50 billion in cuts, to take effect on Oct. 1, just in time for the November congressional elections, in which political control of the Senate will be at stake.

Officials at some federal agencies are predicting that even the first cuts will throw their operations into turmoil, forcing them to reduce maintenance, freeze hiring and furlough employees. They forecast cutbacks in the government’s basic services also.

Rudman dismissed the more dire predictions as “frankly, the kind of crap you hear from bureaucrats around here.” The initial $11.7-billion reduction, he said, “is not going to be really felt by anyone. We spill that much around this town.”

“I don’t accept for a minute that we can’t provide the services we need on a balanced budget,” Gramm added. But he acknowledged that he has been warning his Texas constituents: “Don’t think we’re going to balance this budget at the expense of (only) Massachusetts and New York.”

Series of Deficit Ceilings

The law sets a series of deficit ceilings declining from $171.9 billion in the current year to zero by 1991. Its automatic spending cuts, to be felt equally by non-defense and defense programs, take effect in any year in which Congress and the President cannot agree on budgets that meet the deficit ceilings. Exempted from the automatic cuts are about half of all federal spending, including Social Security, interest payments and several welfare programs.

The law is usually identified only as the Gramm-Rudman Act after the two senators who initially developed the concept. That situation has led Hollings to joke that, if the CIA wants to conceal the identity of one of its agents, it need only let him co-sponsor a bill with Gramm and Rudman.

Seven Months of Debate

The two relatively junior Republicans joined ranks with Hollings, a relatively conservative member of the Senate’s Democratic minority, after last year’s budget debate preoccupied Congress for more than seven months but failed to yield agreement on a deficit-reduction package. Now, the Gramm-Rudman-Hollings law seems destined to consume Congress for the foreseeable future.

Said Sen. Alan K. Simpson of Wyoming, the Senate’s second-ranking Republican: “We’ll be talking more about Gramm, Rudman and Hollings in the next two years than we did about Washington, Jefferson and Lincoln in the last 75.”