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Nearer Budget Reality

March 23, 1986

Newly chosen Senate Republican leaders swallowed hard one year ago and worked with the White House to produce a 1986 budget resolution that included a major political risk: a freeze in Social Security cost-of-living increases. Let's say that the Reagan loyalists in the Senate were not pleased when the White House later caved in under pressure from House Democrats--the other guys, mind you--and endorsed Social Security increases after all. Ouch. Once burned, twice shy.

One year and Gramm-Rudman later, the Senate Budget Committee took one glance at the President's own budget and relegated it to the nearest round file. Then Budget Chairman Pete V. Domenici (R-N.M.) sat down with the ranking Democrat on the committee, Lawton Chiles of Florida, and they wrote their own 1987 budget. The result won swift 13-9 endorsement of the full Budget Committee on Wednesday, with support from both Republicans and Democrats.

It got an immediate icy reception at the White House, for it violates two sacred cows down on the R.R. ranch: It would cut military spending to roughly this year's levels, and proposes a $12.6-billion tax increase on top of the $5.9 billion that the President called for in increased revenues and fees. Details must be worked out later in separate legislation.

The Domenici-Chiles plan is neither perfect nor final. It has to pass the full Senate, then be reconciled with whatever the Democratic-controlled House approves. But, as Domenici noted, it is close to what finally will emerge from Congress this year. This is not an extravagant budget. It would fall within the Gramm-Rudman deficit limit, grant a 2.8% increase in military spending and freeze or trim most domestic programs. Oh, yes, it would allocate the full cost-of-living increase to Social Security recipients and restore a 3% raise to military and civilian pensioners. At some point Congress must take a closer look at the costly annual escalation of federal retirement benefits, but clearly an election year is not the time.

There will be pressure to cut defense spending even more in the House, where Democrats decided that the defense and domestic sides of the budget should share reductions equally, following the 50-50 "logic" of the Gramm-Rudman deficit reduction law. But there is nothing logical about Gramm-Rudman, and the House will only undercut its arguments for lower defense spending by basing them on an arbitrary formula.

Domenici & Co. have forged a budget that would come far closer to reality than the Reagan plan, announced with great fanfare back on Feb. 5. The White House took no role in the Senate committee process this year, although Domenici said that he kept officials advised. "They know their budget resolution was unacceptable," he said. "They've almost acted as if they didn't care."

Domenici's comments lead to a rather disquieting question: Is it better to have the White House involved and bungle the matter, or to have it not seem to care?

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