Congress Ponders Next Move on Deficit : Spending: With defeat of balanced-budget initiative, members are under more pressure than ever to find a solution.

The budget will remain unbalanced, so now what?

Although the House this week decided that a constitutional amendment is the wrong way to try to balance the federal budget, voter disgust over Washington’s inaction remains undimmed. So Democratic leaders who successfully defeated the amendment now find themselves under stronger pressure than ever to come up with a solution to the government’s record deficit.

“We need action, now, not later, real deficit reduction, not a new facade, no more palliatives, no more smoke screens, no more delays,” Rep. Sander M. Levin (D-Mich.) said Friday. “We need to step up to the plate right now and take a whack at the deficit.”

House leaders promised to develop their own proposals in order to find some way to attack the explosive growth in mandatory spending programs--which they say is the key to bringing the deficit under control.

Already, House Speaker Thomas S. Foley (D-Wash.) and Majority Leader Richard A. Gephardt (D-Mo.) have asked House Budget Committee Chairman Leon E. Panetta (D-Carmel Valley) to draft a budget enforcement measure within the next few weeks. It would modify the existing deficit-reduction rules from the 1990 budget enforcement act in order to deal more directly with the soaring costs of entitlement, or mandatory, programs.

The Democratic leadership in the Senate, which did not take a vote on the balanced-budget amendment because of its failure in the House, has not yet begun such detailed work on alternative budget enforcement rules, Senate leadership aides say. But House leaders warned that the voters will demand some answers.

“This issue is not going to go away,” Panetta said. “And I do not intend for it to go away because I will bring to the floor an enforcement procedure to move us toward a balanced budget.”

Added Gephardt: “The (Democratic) leadership will (propose) a deficit-reduction budget enforcement bill that will soon be sent to the floor for consideration by the full House.”

Democratic aides say that the House leaders want a budget measure that would essentially be a new version of the old Gramm-Rudman law, setting specific deficit-reduction targets and imposing across-the-board spending cuts if Congress fails to reach the goals. In addition, the pay-as-you-go spending requirements of the 1990 budget enforcement act would be retained indefinitely as part of a new austerity package.

Democratic leaders also say that they hope to draft proposals that will force Congress to address spiraling health care costs that heavily influence the growth of mandatory programs.

But they warn that any such action will be painful and perhaps politically impossible in an election year. Ultimately, they say, Congress may not be able to do any more than keep spending under the limits already in place from the 1990 budget act.

The Democrats’ new austerity policy will first be tested in the coming days in the House Appropriations Committee, where Democratic leaders intend to make spending reductions in the 13 money bills that finance the federal government. The strategy is intended to dramatize congressional austerity as well as avoid even deeper cuts almost sure to be proposed on the House floor this year.

“Beginning next week, the appropriations committee will begin sending to the floor the most restricted agency budgets funded in the last decade,” Gephardt said.

On Friday, just a day after the House defeated the Administration-backed balanced budget amendment, a House Appropriations subcommittee rebuked President Bush by slashing his foreign aid request by $1.1 billion. Committee Democrats said that Bush’s large foreign aid request showed that he was not serious about balancing the budget. “Does (the Bush Administration’s) commitment (to a balanced budget) last more than one day?” asked subcommittee chairman David R. Obey (D-Wis.).

As a start, the legislative branch appropriations for operating the House will be shaved by nearly 6% and executive branch agencies may be cut back just as much.

But while the Democratic leadership hopes to put a lid on the upcoming spending bills to make a political statement about Democratic fiscal responsibility, the political pressure from members to expand spending may make that impossible.

“Getting through the appropriations process, and just meeting the existing caps on spending from the 1990 budget agreement, is going to be excruciating,” said a senior aide to Gephardt.