Bending the Budget Rules

Thwarted by Congress in its efforts to change the rules of federal budgeting, the Reagan Administration is bending the rules on its own to achieve the same effect.

The latest frustration for President Reagan came this week when the Senate defeated by a one-vote margin the proposed balanced-budget amendment, reversing a two-vote Senate victory of four years ago. The amendment would have failed to pass the House in any event.

Congress also has rejected the President’s other pet rule change, the line-item veto. Such a law would permit the Chief Executive to pencil out specific appropriations from multibillion-dollar spending bills.

But recently the President has taken a backdoor approach to the line-item veto by refusing to spend the money appropriated by Congress through a procedure spelled out in the budget act as “deferral.” Deferrals amount to $15 billion so far this fiscal year, including $188 million for putting crude oil in the strategic petroleum reserve and $751 million for two aid-to-cities programs that the President has tried unsuccessfully to abolish: community development block grants and urban development action grants.

The refusal to allocate community development block grants has particularly ired a senator of Reagan’s own party, Slade Gorton (R-Wash.), who notes that the program already has absorbed 15% cuts this fiscal year. The deferral would trim 16% more from the program. Gorton, Sen. Bob Packwood (R-Ore.) and others are challenging the President’s authority, both through legislation and in the courts, to freeze spending unilaterally.

In the past, congressional leaders and David A. Stockman, former director of the Office of Management and Budget, reconciled their differences and most of the frozen funds were freed. The new budget director, James C. Miller III, is taking a harder line. He has threatened a Reagan veto of a $1-billion supplemental appropriations bill that includes a provision curbing Reagan’s deferral power.

Miller acknowledges that he considers the deferral the same as a line-item veto, and he wants to hang onto it. But since 1789 the Constitution has directed that Congress determine federal spending, subject only to a direct presidential veto. The deferral was meant to be a limited tool for cash-flow management, not to make policy in contravention of Congress.

Reagan has a favorite slogan: “Obey the rules or get out.” He should obey the rules.