NEWS ANALYSIS : Latest Version Amounts to a Legislative Blank Check

When members of Congress saw the budget plan negotiated by the White House and the congressional leadership last week, many of them balked at what they called a legislative straitjacket. By contrast, the new plan developed by the lawmakers over the weekend is a legislative blank check.

The new plan, like the old one, contains broad promises to reduce spending and increase taxes. But unlike the formula negotiated in the 4 1/2-month budget summit, Monday’s plan contains almost no decisions about which programs to cut or which taxes to raise. Those blanks are to be filled in over the next two weeks by formidable power centers in Congress--committees that write taxes and create benefit programs.

Yet since these committees have repeatedly failed to break the impasse over the federal deficit in past years, Monday’s action leaves open a crucial question: Will Congress finally take real action to reduce the flow of red ink, or will it once again resort to the fiscal equivalent of smoke and mirrors?

“It is another vague promise that something is going to be done,” declared a skeptical Sen. Phil Gramm (R-Tex.), who opposes the new plan. “At some point you have to stop promising and start acting.”

Although House Speaker Thomas S. Foley (D-Wash.) and other congressional leaders insist that the new plan would cut the deficit just as much as the old one--$40 billion in the fiscal year that started Oct. 1 and $500 billion over the next five years--it is far from clear that this will happen. Congressional committees and presidents have had a long history of developing legislation that promises deficit cuts but does not deliver them.

Drastic action of the sort that Gramm and others advocate to reduce the deficit has proven impossible to legislate for at least a decade and the events of the weekend suggest that nothing may have changed.

Voters apparently still want to see the deficit come down, at least in theory, but they oppose tax increases or spending cuts in practice. Members of Congress, sensitive to what the voters want, look for ways to postpone making a decision.

In purely political terms, however, one thing is clear from last weekend’s budget shoot-out: Bcause the committees that would be called on to write the details of the new plan are dominated by Democrats in both houses, the final result is likely to eliminate much of what President Bush and his aides thought they had won during 4 1/2 months of painful bargaining with congressional leaders.

Democratic leaders, trying to keep a bipartisan face on the situation, insisted publicly that the new plan is almost identical to the old one, just more “flexible,” as Foley put it.

At the White House, however, dejected Bush aides said that they know better. As Bush put it in his televised appeal for the budget plan last week, the bipartisan deal was not the White House’s idea of the best budget but it was the best budget the White House was likely to get.

Realizing how much they have lost, many of Bush’s advisers blame conservative House Republicans, whose opposition blocked last week’s budget plan, particularly the conservative leader, Rep. Newt Gingrich of Georgia.

But the Administration’s loss also reflects a fundamental weakness of Bush’s overall legislative strategy. The strategy, put together by White House Chief of Staff John H. Sununu, has concentrated on blocking Democratic initiatives with Bush’s veto power, not on assembling a coalition large enough to pass initiatives of his own.

That strategy worked fine so long as the White House was primarily concerned with blocking legislation it opposed, not with passing legislation it wanted. Now, with the flaws of his veto strategy highlighted, members of Congress are publicly sniping at Sununu’s high-pressure tactics in trying to round up votes. They are also renewing old charges that the former New Hampshire governor does not understand how the legislative process works.

Whoever is to blame, Bush almost certainly will now lose several items that were key in his agreeing to last week’s budget plan. At the top of the list are special tax breaks that Bush had sought for investors who put money in new small businesses. That provision has been labeled “junk” by House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.), whose panel will write the tax provisions of the new budget.

Bush argued that the new tax breaks would foster economic growth. Rostenkowski and other critics said that it would merely lead to new tax shelters for the rich.

The President will also lose much of the Medicare cutback--$60 billion over five years--that had been negotiated by his budget director, Richard G. Darman. House leaders have made it clear that they want to ease the pain on Medicare recipients, a politically potent force.

Bush may also have to swallow an income tax increase on the wealthy, perhaps as a trade-off for a lower tax rate on capital gains, which he and his GOP allies had wanted. That trade, which the White House rejected in the budget negotiations last week, has been “gaining in popularity” on Capitol Hill, Foley said.

The closed-door budget summit negotiations of the summer were designed to get around the problem of voting for politically unpalatable actions by producing a plan that everyone could support but for which no one could be blamed.

Instead, everyone was blamed and only a minority supported it.

Now, in the traditional committee process, all the reluctance to make unpopular decisions may be back. The committees will also be pressured anew by lobbyists, who were largely excluded from the budget summit but who will be present in force over the next few weeks to minimize the cost of the plan to the interests they represent.