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Timetable Becomes Less Ambitious : House Approves Return to Automatic Deficit Cuts

September 23, 1987|KAREN TUMULTY | Times Staff Writer

WASHINGTON — The House, somewhat abashedly promising that Congress would succeed where it failed before, on Tuesday approved legislation that would put teeth back into the Gramm-Rudman deficit reduction law, although it set a far less ambitious schedule for meeting the law's goal of a balanced budget.

The legislation, which will be considered today by the Senate, would restore the law's threat of automatic spending cuts if Congress does not meet a set of deficit-reduction targets.

It was approved 230 to 176. President Reagan has not indicated whether he will support it.

Where the original law envisioned a balanced budget in fiscal 1991, the new schedule pushes that deadline back by two years. What's more, in the fiscal year that begins next month, the legislation would accomplish only about two-thirds of the deficit reduction promised in the budget that Congress passed three months ago.

'Sorry Comment'

"This is a terrible way to run the country, and the fact that we have come to this is a sorry comment on the President and Congress," Rep. Martin Olav Sabo (D-Minn.) said. "It is a clear display of our inability to deal with the deficit crisis."

But House Minority Leader Robert H. Michel (R-Ill.) said: "We have broken the evil spell of paralysis and actually moved forward. . . . I think we have a chance to seize the moment and do some good for the country."

Perhaps the majority view was expressed by Rep. Leon E. Panetta (D-Monterey). Between the tug of a President unwilling to raise taxes and a Congress refusing to make further cuts in social programs, the more modest budget-balancing plan was "the only hope we have," Panetta said.

It was attached to legislation that would raise the federal borrowing limit to $2.8 billion from the current $2.35 billion--enough, Treasury Department officials said, to allow the government to continue operating through May, 1989.

Seeks to Force Choices

The Gramm-Rudman law, passed at the end of 1985, promised that it could do what politics could not--force Congress and the President to face the difficult choices necessary to bring the ballooning federal deficit under control. If they did not meet set reduction targets, the law would force the unpalatable alternative of automatic spending cuts, coming half from domestic programs and half from defense.

But when the Supreme Court invalidated the automatic-cut mechanism last year, it let Congress and President Reagan off that fiscal hook. The bill seeks to correct Gramm-Rudman's constitutional flaw by giving the White House's Office of Management and Budget the power to enforce the cuts, rather than an agency of the legislative branch as the original law prescribed.

Under the new timetable, Congress and the President must reduce the deficit this year by $23 billion. That falls far short of the more than $30 billion called for in the budget resolution. It would leave a projected deficit of $144 billion, rather than the $108 billion called for under the original Gramm-Rudman law, named for Sens. Phil Gramm (R-Tex.) and Warren B. Rudman (R-N.H.).

$12 Billion in Taxes

The plan probably would mean about $12 billion in new taxes, which is twice what President Reagan has said he will accept, but significantly less than the $19 billion called for by the budget resolution.

Rep. David R. Obey (D-Wis.) predicted that the revamped law would be no more successful than its predecessor, because it continues to substitute the "procedural gimmick" of automatic cuts for hard political choices.

"Gramm-Rudman in the past has written its deficit-reduction promise in disappearing ink, and this will prove no different," Obey warned.

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