House Democrats Propose Balanced-Budget Measure

The House Democratic leadership on Thursday introduced its own version of a balanced-budget amendment to the Constitution that would exclude Social Security payments and payroll taxes, as well as interest on the debt, from calculation of government spending and revenues.

The measure was introduced before a House vote on a more popular balanced-budget amendment offered by Rep. Charles W. Stenholm (D-Tex.) and 277 other House members that is expected to win approval in mid-June.

Critics said the plan, offered by House Majority Leader Richard A. Gephardt (D-Mo.) and other key Democrats, was simply a device to provide political cover for members of Congress who wanted to vote for some balanced-budget amendment but opposed the Stenholm approach on grounds it would impose overly severe spending cuts on popular federal programs.

The new plan would require the President to submit a balanced budget each year unless he made a “Declaration of National Urgency” that would require approval by Congress before deficit spending could occur.

It also would prohibit Congress from spending more than the amount recommended by the President for that fiscal year. It would take effect the year after ratification by the states.

Gephardt said the Democratic leadership also would seek congressional approval of detailed enforcement legislation that would require automatic spending cuts for all federal programs except Social Security and interest on the debt, as well as tax increases, if outlays exceeded revenues in any year.

Gephardt made it clear that he and other supporters of his plan would attack the Stenholm amendment on grounds that it would not protect Social Security beneficiaries against cuts in their monthly payments to help eliminate the deficit.

“No member of Congress who believes in the integrity of Social Security can posture as a friend of the elderly while voting against our amendment,” Gephardt said at a news conference. “We intend to make those arguments very, very strongly.”

The Stenholm proposal would require a three-fifths vote of both the House and Senate to approve spending which exceeds revenues in times of recession or other emergencies.

Under current accounting methods, the growing Social Security surplus tends to mask the size of the budget deficit created by the government’s failure to match expenditures with revenues. By excluding the rapidly increasing interest payments--expected to be the largest single spending category in the coming year--the effect on the deficit would be about neutral, congressional sources said.

The proposed implementing legislation, worked out primarily by Rep. David R. Obey (D-Wis.), would require five years of spending cuts totaling $63 billion. Under Obey’s plan, the deficit would be eliminated by 1997.

House Majority Whip David E. Bonior (D-Mich.) said the Stenholm amendment would produce “economic disaster” by requiring extremely deep spending reductions or major tax increases.