Toying With Magic

Before Americans rally to President Reagan’s call for reform of the federal budget process in 1987, they should consider what budget reform would not do:

--It would not solve the deficit problem. The national debt has not doubled in the past six years to more than $2 trillion merely because of flaws in budgeting procedure.

--The President’s pet ideas of a balanced-budget constitutional amendment and a line-item veto would not necessarily impose fiscal responsibility on Congress.

--Reform would not correct any imbalance of power in Washington. It might do just the opposite. The trend throughout American history has been to give the President more budget authority, although the Constitution deliberately limited presidential power by delegating all spending matters to Congress.

There have been two major budget reforms in this century--in 1921 and in 1974. A 1921 law formalized the modern executive budget and created the Budget Bureau, now known as the Office of Management and Budget. OMB has steadily accumulated power ever since. The 1974 budget reform came in reaction to President Richard M. Nixon’s refusal to spend appropriated money. Congress revised its own procedures and limited the President’s ability to impound appropriations. But some authorities believe that the law actually strengthened the President’s hand in general budget matters.

The modern White House wields tremendous power over federal spending. Reagan has forced significant shifts in priorities. Military spending has gone from 23% of the budget to 28% while controllable domestic spending has declined from 25% to 17%. Total outlays will grow by only 1% this fiscal year.

Experience with the Gramm-Rudman deficit-control law illustrates why a balanced-budget amendment would not likely have any real effect on the process. Political will and/or necessity will almost always find a way around arbitrary procedures. Nothing prevents the President from submitting a balanced budget now.

Giving the President authority to veto individual items from an appropriations bill without killing the entire measure would shift the balance of power even further toward the executive. The line-item veto would be an invitation to vote-trading or punishing of individual lawmakers.

There may be merit in proposals for a two-year budget and for the development of a capital budget that provides a separate accounting for investment in long-term federal assets such as buildings and dams. Congress now requires the Pentagon to budget defense in two-year cycles. The capital budget would distinguish justifiable indebtedness for depreciable assets as compared with routine government operations. But it also could be used to cloak the effect of a deficit.

Budgeting cannot be automated and computerized. It is a political process that pits the President’s view of national priorities against Congress’ view. This conflict then is reconciled in the way it always has been--through negotiation and compromise or, failing that, the exercise of political power within the restraints set by the Constitution and the voters. It may be messy and it may be frustrating to Presidents, but the process is the magic that makes the American system work.