Court Finds Key Part of Gramm-Rudman Law Unconstitutional

A special three-judge federal court today struck down as unconstitutional a central provision of the Gramm-Rudman law, designed to balance the federal budget within five years.

But the judges, who said the law illegally vests excessive power in an employee of Congress, delayed the effect of their ruling pending an appeal, expected later today, to the Supreme Court.

If upheld, today’s ruling could gut enforcement of the law. It states that the first $11.7-billion round of spending cuts under Gramm-Rudman, ordered by President Reagan to take effect March 1, is “hereby declared without legal force and effect.”

On Capitol Hill, one of the bill’s original sponsors, Sen. Phil Gramm (R-Tex.), predicted that the law will be upheld by the high court.

But opponents, including Sen. Daniel Patrick Moynihan (D-N.Y.), applauded the ruling. Moynihan said he hopes that the Supreme Court “rescues the nation from Congress’ bad decision.”

Passage of the law last year helped spark an extended rally in the markets because investors thought it enhanced the prospects for trimming the deficit and lowering interest rates, which make investments in stocks and bonds more attractive.

The three-judge panel unanimously overturned the section of the Gramm-Rudman law requiring that mandatory, across-the-board spending cuts be triggered when Congress fails to meet specified deficit-reduction targets.

The ruling came on a lawsuit filed by 12 members of Congress and a federal employees’ union. The suit contended that the automatic triggering mechanism was unconstitutional.

The panel overturned the key provision of the law on the ground that “it vests executive power in the comptroller general, an officer removable by Congress.”

Under Gramm-Rudman, the comptroller general, head of Congress’ General Accounting Office, was given the authority to determine the size of the automatic spending cuts that would be triggered.

The ruling turned completely on the technical issue of whether the comptroller general worked for Congress or for the President.

‘No-Man’s Land’

The court said that the official, who is appointed by the President but can be removed only by Congress, is “in a no-man’s land whose powers are neither exclusively executive nor exclusively non-executive.”

By calculating the precise amount of budget cuts for each federal agency and program, the comptroller general would be exercising “the sort of power normally conferred upon the executive,” the panel ruled.

That violates the constitutional separation of executive and legislative powers, the court said.