Key Deficit-Law Provision Voided : Comptroller’s Gramm-Rudman Role Is Illegal, High Court Holds

The Supreme Court Monday held unconstitutional the key deficit-reduction provision of the Gramm-Rudman law, Congress’ landmark plan to balance the federal budget by 1991.

In a widely watched test of the governmental separation of powers, the court ruled 7 to 2 that the law’s automatic deficit-reduction mechanism improperly empowered the comptroller general, an officer of Congress, to make the cuts needed to meet the act’s strict spending limits.

The decision does not invalidate the entire act--but it leaves it up to Congress itself to make the massive cuts, rather than assigning the task to an unelected official.

The court said that, by placing such authority with an officer removable only by itself, Congress had effectively kept control over the execution of the law and intruded on the constitutional functions of the executive branch.

Cites Fiscal Problems

“No one can doubt that Congess and the President are confronted with fiscal and economic problems of unprecedented magnitude,” Chief Justice Warren E. Burger wrote for the court, “but the fact that a given law or procedure is efficient, convenient and useful in facilitating functions of government, standing alone, will not save it if it is contrary to the Constitution.”

The justices delayed the effect of their ruling for 60 days. The law already has triggered $11.7-billion worth of automatic spending cuts in the current fiscal year, and the delay will allow Congress time to enact those cuts into law. If Congress does not act, the cuts will be voided.

But whether the lawmakers will be willing to take the political risks of voting cuts in programs favored by their constituents remains a question. As originally enacted, Gramm-Rudman had given Congress a vehicle that would provide for deficit cuts without the necessity of such painful votes.

President Reagan, reacting to the decision, said that “now Congress must make the difficult choices” and urged the lawmakers to “act promptly” to carry out the dramatic cuts required.

The law’s main supporters quickly announced that they will introduce legislation to eliminate the congressional authority over the comptroller that the court found objectionable.

Concern Dispelled

In their ruling, the justices sought to dispel concern that they might be jeopardizing the status of several independent agencies that enforce laws but are not strictly within the executive branch.

Burger, in a footnote, rejected suggestions that agencies such as the Federal Trade Commission and the Federal Election Commission are now under a cloud because of the decision, saying that such interpretations are “wide of the mark.” Members of those agencies may be removed by Congress only through impeachment, but the comptroller--under a law tracing back to 1921--can be removed by Congress for lesser reasons, such as inefficiency.

The justices made the ruling as they ended their 1985-86 term with a flurry of actions. The widely awaited Gramm-Rudman decision was announced as the last decision of the day by Burger, who is retiring from the court after serving as chief justice for 17 years.

The case centered on technical issues--but it carried immense practical impact in the ambitious effort to trim the nation’s spiraling budget deficit, now about $200 billion annually. In addition, it featured an unusual confrontation between the Reagan Administration and Congress, in which the President supported the act’s deficit-reducing goals but challenged Congress’ delegation of pivotal authority to the comptroller.

Sponsors of Legislation

The law drew its name from two of its sponsors, Sens. Phil Gramm (R-Tex.) and Warren B. Rudman (R-N.H.). Sen. Ernest F. Hollings (D-S.C.) was the third sponsor.

The act mandates a balanced budget by 1991 through a series of progressively lower annual deficit targets--and it gave an unprecedented role to the comptroller, the head of the General Accounting Office, who is appointed to a 15-year term by the President and may be removed from office only by Congress.

If the deficit-reduction targets were not met by Congress itself, it was left to the comptroller to calculate the program-by-program cuts necessary to comply with the law--and the President, in turn, was required to order those cuts into effect.

A fallback provision written into the law says that, if the role of the comptroller was invalidated in court, the Congressional Budget Office and the White House Office of Management and Budget would prepare a list of cuts that Congress itself, if it wished, could approve and send to the President to be implemented.

Congressmen Brought Suit

The act was challenged by a group of congressmen led by Rep. Mike Synar (D-Okla.) and lawyers for the National Treasury Employees Union, who said that the law represented an unconstitutional delegation of power by Congress. The Justice Department joined in the attack on the constitutionality of the automatic deficit-reduction feature.

Last February, a special three-judge federal District Court panel struck down the deficit-reduction mechanism as a violation of the separation of powers.

The high court decision (Bowsher vs. Synar, 85-1377) upheld the special court, concluding that the deficit-reduction provision was unconstitutional because the comptroller is removable from office only by Congress--and that Congress may not retain such power over an officer performing executive powers.

Burger, in an opinion joined by Justices William H. Rehnquist, William J. Brennan Jr., Lewis F. Powell Jr. and Sandra Day O’Connor, noted that, although it is Congress’ function to enact legislation, under the Constitution it is up to the executive branch to carry out the law.

The court pointed out that, under the Gramm-Rudman law, the comptroller, in projecting revenues and expenditures and specifying the required cutbacks, would be exercising “his independent judgment and evaluations.”

Concurring Opinion

Justice John Paul Stevens, joined by Justice Thurgood Marshall, issued a concurring opinion, saying that Congress had improperly delegated its power to make policy.

In dissent, Justice Byron R. White called the decision “misguided,” saying that the deficit-reduction process in the act was of “minimal practical significance” and presented “no substantial threat to the basic scheme of separation of powers.”

In another dissent, Justice Harry A. Blackmun said that the constitutional problem posed by the comptroller’s role could be solved by ruling that Congress did not have the power to remove him from office.