Senate Backs Restoration of Automatic Spending Cuts

The Republican-controlled Senate approved a plan Wednesday to restore the threat of automatic spending cuts under the Gramm-Rudman law by giving the White House the power to order the reductions.

The revisions to the original law passed on a 63-36 vote after sponsors included a number of provisions limiting the leeway it would give the White House Office of Management and Budget in determining how large the reductions would be and how they would be distributed.

If ultimately approved by the heavily Democratic House and signed into law by President Reagan, the revised plan would force Reagan and Congress once again to face the prospect of painful, indiscriminate spending reductions, unless they follow the law’s plan to eliminate the deficit by fiscal 1991. That would require cutting the deficit to $144 billion--or by roughly $30 billion from current policy--for fiscal 1987, which begins Oct. 1.

The Supreme Court earlier this month struck down the law’s original automatic-cut provision because it allowed the comptroller general, an unelected officer of Congress, to order cuts by the executive branch. That, the court ruled, amounted to a violation of the Constitution’s separation of powers doctrine.

As a result of the court decision, the spending cuts could occur only if Congress voted for them and the President signed them into law. “The guillotine, in effect, was dismantled,” said Sen. Lawton Chiles (D-Fla.), the Senate Budget Com mittee’s ranking Democrat.

The measure’s chances of becoming law are strengthened by the fact that it is attached to legislation raising the federal debt ceiling by $244 billion, to $2.32 trillion. Without the additional borrowing authority granted by the bill, the government will be forced to halt operations next month.

Urgency of Measure

The debt-limit bill’s urgency traditionally makes it an attractive means of carrying other legislation, including the original Gramm-Rudman law, which was part of a similar measure last year.

Gramm-Rudman’s automatic annual cuts would go into effect if the projected deficit misses its target by more than $10 billion. Congress has approved a fiscal 1987 budget that ostensibly would reach the $144-billion goal, but if an Aug. 15 economic estimate shows that it has overshot the mark by at least $10 billion, Congress may go scrambling for additional deficit-reducing measures that would avoid the automatic cuts in October.

As in the earlier version of Gramm-Rudman, the automatic spending cuts in the legislation passed Wednesday would remain equally divided between Reagan’s top-priority defense budget and social spending programs that Congress wishes to protect, ensuring that they are viewed with equal dread on Capitol Hill and in the White House.

Backing Into Corner

“The whole game here is to back us into a corner,” added Sen. Ernest F. Hollings (D-S.C.), an author of the original Gramm-Rudman law and of the modification approved Wednesday.

Hollings and the law’s two Republican authors--Sens. Phil Gramm of Texas and Warren B. Rudman of New Hampshire--initially proposed giving the OMB authority to make the cuts with relatively little congressional input.

However, other senators had expressed fear that the plan could give the President’s budget office too much power. By using rosy economic estimates, for example, the OMB could make it appear that no cuts were needed, they argued. Similarly, they said, the Administration could manipulate the figures to spare programs it liked.

To satisfy those critics, Chiles and Senate Budget Committee Chairman Pete V. Domenici (R-N.M.) produced a compromise that would specify the economic assumptions to be used by the OMB for fiscal 1987 and allow Congress to reject the Administration’s projections in future years.

Limiting OMB’s Authority

The plan also limits the OMB’s authority to diverge from Congress’ own estimates of how fast authorized funds would be spent from individual programs--a tactic that conceivably could be used to shelter defense from receiving its full share of reductions.

Still, some opponents remained unconvinced. “What kind of system are we creating, what kind of potential abuse down the road?” Sen. Gary Hart (D-Colo.) asked. Instead, he argued, Congress should consider repealing Gramm-Rudman.

However, Domenici insisted that the measure put “reasonable bounds” on OMB, without violating the Supreme Court’s dictate that the executive branch not be subject to orders from an unelected congressional official.

California Republican Pete Wilson voted for the revision to Gramm-Rudman; Democrat Alan Cranston voted against it, as he had on the original legislation. Domenici said the Administration had not yet expressed an opinion on the bill.