Budget Law Faces Court Challenge Today

As federal agencies grudgingly earmarked the first $11.7 billion in spending cuts mandated by the Gramm-Rudman deficit-reduction law, a three-judge panel prepared to decide today whether to undo their labors--and likely spark a political panic--by ruling the law unconstitutional.

The ruling of the U.S. District Court panel, which automatically will be appealed to the Supreme Court, opens what could be a historic legal battle between the White House and Congress.

Anticipation Created

“What’s creating the undercurrent of anticipation around this town,” said political scholar Norman Ornstein of the American Enterprise Institute, “is the question of whether Gramm-Rudman gets rendered toothless. . . . Would this mean the whole process is dead?”

By “the whole process,” Ornstein means the legal gears and pulleys by which the Gramm-Rudman law clanks away at the federal budget deficit and the political consensus that keeps that machinery moving--although no one in Congress or the White House much likes it.

Under the law, Congress either approves budgets that gradually erase the $175-billion annual deficit over five years, or the Gramm-Rudman machinery makes the cuts automatically, without Congress’ interference.

Reasonable Compromise

But the political consensus--in fact, the hope--is that the law will prove so Draconian that it will force the reasonable compromise on federal spending that the White House and Congress so far have been unable to forge.

In its ruling today, the special panel likely will decide only narrow questions. One is whether Congress violated the Constitution’s checks and balances on the three branches of government by granting control of the budget-cutting machinery to three unelected officials: the White House budget director, the head of the Congressional Budget Office and the comptroller general.

The court also was asked whether the comptroller general’s marching orders under the law--to lay out specific deficit-reducing cuts that the White House then would be required to implement line for line--usurps the President’s executive authority.

Democracy ‘at Stake’

“If Gramm-Rudman is not overturned, we have basically turned this government over for the first time to a group of people who are unaccountable to the American public,” said Rep. Mike Synar (D-Md.), one of 11 legislators who have filed suit with a federal employees’ union to block the law. “Two hundred years of constitutional democracy are at stake here.”

Several scholars disagreed Thursday, saying that the legal issues at stake are somber indeed, but not particularly historic.

“It’s possible to decide the case either way on a variety of narrow grounds without making any really new separation-of-powers law,” Harvard Law School Prof. Laurence H. Tribe said.

Although courts are often inscrutable, some experts speculated Thursday that the panel would void any delegation of budget-cutting powers to the troika of White House and congressional officials as a violation of the separation of powers principle. The Supreme Court strongly affirmed that principle twice in the last decade, in sweeping decisions that ended Congress’ legislative veto of presidential actions and reined in the Federal Election Commission’s powers.

‘Fallback’ Clause in Law

In theory, a third such ruling would not immobilize the Gramm-Rudman machinery because the law has a “fallback” clause under which Congress could simply pass legislation ordering the troika’s annual budget cuts.

In practice, however, observers fear that it would destroy the political consensus for budget-balancing by removing the fearsome certainty of the deficit reductions.

“Mr. Reagan ran on the platform of a balanced budget in 1980, and four years later he won reelection with 49 states,” said Henry Bellmon, a former Republican senator from Oklahoma who was a powerful Senate Budget Committee member. “There doesn’t seem to be any popular demand, as the politicians interpret it, to do anything about the budget . . . as painful as this.”

However, Ornstein said he was not so certain. “It’s almost a foregone conclusion that we’re going to get that $11.7 billion” now being trimmed, he said. “Even if they do take that heart out of the law, it’ll beat on through the rest of the year.”

But “if the court does strike out the automatic cutback provision, you’re talking about a much weaker statute down the road when, frankly, the politicians would take over anyway.”