Drive to Balance Budget Faces Risks : Congress: GOP’s goal of a zero deficit is among the more serious efforts in recent years. But it’s particularly vulnerable to shifting political winds.

Recent congressional history is littered with the shards of broken promises to eliminate the federal budget deficit, but the Republican budget-balancing plans nearing approval in Congress represent a bold effort to keep history from repeating itself.

By presenting a detailed road map--and not just vague directions--on how to get to a balanced budget within seven years, Republicans seem determined not just to promise an end to government red ink but to deliver it. Even some Democrats grudgingly concede that the GOP budget represents the most serious effort yet to reach that goal.

But like past adventures, this journey to a deficit-free budget will be buffeted by political and economic forces--recession, war, natural disasters, even mere upticks in unemployment--that can easily make a mockery of seven-year budget planning.

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And this balanced-budget drive faces risks all its own. Born of a distinctive climate of anti-government cynicism, it is particularly vulnerable to shifting political winds over the next seven years.

“This is driven by a political mood more than anything else,” said Rep. George Miller (D-Martinez), who served on the House Budget Committee in the 1980s. “Will that mood hold up? There’s never been a political mood that’s held up for seven years in the history of America.”

Added Sen. Phil Gramm (R-Tex.), author of one of the most ambitious anti-deficit efforts of the 1980s: “Is this an iron-clad guarantee of a balanced budget? No. If the political climate continues through the 1996 elections, . . . [then] I think this is meaningful. A reversal in ’96 will knock it off course.”

The budgets passed by the House and Senate before Congress began this week’s Memorial Day recess are just the first steps in the long and difficult journey required to carry out the GOP promise to balance the budget by the year 2002. First the House and Senate must reconcile their differences after they return to work next week. Then Congress will face the even tougher job of drafting legislation that actually meets the broad spending targets set by the budget, by abolishing some programs and cutting and restraining the growth of others.

“There is more credibility at this point than there was in the past,” said Robert D. Reischauer, former head of the Congressional Budget Office and now a Brookings Institution budget expert. “But you shouldn’t be popping the cork on the champagne bottle yet. You should be putting the champagne on ice and waiting for the really tough decisions.”

This is hardly the first time that Washington has sworn off deficits. Ronald Reagan came to town in 1980 promising to balance the budget even while cutting taxes and boosting defense spending. His first budget called for eliminating the $74-billion deficit he had inherited by 1984. In fact the deficit rose to $185 billion by then. A more concerted effort to balance the budget came in 1985, when Congress passed a law designed by Gramm and Sens. Ernest F. Hollings (D-S.C.) and Warren G. Rudman, a New Hampshire Republican who left the Senate in 1992.

To balance the budget by 1990, the law set declining deficit targets for each of five years. If Congress failed to meet those targets, the law called for automatic cuts to do the job.

The law was fraught with difficulties. It excluded some of the biggest federal programs, including Social Security, Medicare and welfare, from the threatened cuts. Less than a year after it was enacted, the law was eviscerated by a Supreme Court ruling that declared the spending-cut scheme unconstitutional. The law was rewritten and the deadline for balancing the budget was put off until 1993. But, critics said, it had become too easy to meet the budget targets by accounting gimmickry rather than real deficit reduction.

The law was scrapped in 1990 as part of a budget agreement between President George Bush and Congress.

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A key weakness of the Gramm-Rudman-Hollings law, its critics said, was that it set the goal of reducing the deficit without a real plan for doing so. That’s where analysts think the current GOP effort has a leg up.

The House budget is particularly detailed in its recommendations to abolish three Cabinet departments, eliminate hundreds of other agencies and programs and restructure Medicare, Medicaid and welfare. To the extent that Congress follows the strategy of abolishing rather than just trimming programs, Republicans argue, the changes approved this year have a better chance of sticking.

What’s more, Republican budgeteers will have tools of fiscal discipline that were not used in the 1980s. The GOP budget would set fixed ceilings on discretionary spending and impose “pay as you go” rules requiring that tax cuts and other bills to increase the deficit be accompanied by offsetting savings. These forms of fiscal restraint were first imposed as part of the 1990 budget deal and would be extended through 2002 by the GOP budget.

Many analysts voice more confidence in the Senate’s budget plan than in that of the House. The Senate is more cautious in its assumption that the government will receive a bonus of up to $170 billion over seven years because of lower interest rates and increased economic activity. The Senate treats that “economic bonus” as a contingency fund that will be available only after a balanced-budget plan is enacted. But the House uses part of that projected $170 billion to balance its budget.

A controversial feature of the House budget is the fact that it postpones its deepest cuts in projected spending until the end of the seven years. That is a risky approach, some analysts warn, because the political will to sustain painful policies may flag over time.

“As things start biting, the political momentum of this year will have dissipated,” said Richard Kogan, a senior fellow at the Center on Budget and Policy Priorities, a Washington research group that has opposed many of the GOP proposals.

Congress is already feeling pressure to back off. Nervous about the reductions proposed for agriculture programs, farm state lawmakers persuaded House budget leaders to include language calling for the agriculture items to be reviewed in 1998 if the farm economy goes sour.

Indeed, anything this Congress does can be reversed by a future Congress, so the Republicans’ seven-year plan depends on voters continuing to elect lawmakers who are just as committed to the budget-balancing goal--or who fear the political cost of backing away from this Congress’ commitment.

“If we get to 2002 and still have a deficit, voters are going to say: ‘Why?’ ” said Susan Tanaka, vice president of the Committee for a Responsible Federal Budget. “It’s such a visible promise, it’s hard to see how politicians can just walk away from this.”

A key question will be how voters react when they begin to feel the effects of the austerity measures. If they squawk, politicians may have no compunction about scrapping this Congress’ promise as unceremoniously as they did the Gramm-Rudman-Hollings law.

“People will begin to understand and feel the ramifications of a single focus on the balanced budget,” Miller said. “I don’t think it can be maintained.”