Remember last spring? The Congress wrestled mightily and long with its preliminary spending plan for fiscal 1978, but nearly collapsed in disagreement over how much money to spend on defense.
To listen to much of the debate and to witness the several near-breakdowns in the year-old budget process, one could not have been faulted for thinking that the level Congress set as a guide to its authorizing and appropriating committees cut defense spending perilously close to the bone.
One might have thought so, but one would have been wrong.
The smoke has cleared. The appropriations committees have appropriated and the House and Senate Budget Committees have reconciled what actually happened this summer with the targets they set last spring. Congress now must write a binding budget for the fiscal (or federal spending) year that starts Oct. 1.
Congress has spent more than it planned to last spring in several areas. There could be at least one more nasty battle on the Senate floor as budget committee chairman Edmund S. Muskie (D-Me.) tries to pare agriculture spending.
But the defense appropriation came in well below the supposedly stringent ceilings. Far from putting an unusually heavy burden on the spending ability of the Pentagon, the defense-spending levels authorized by the House and Senate for next year are several billion dollars below what many argued last spring was the lowest possible level that could be reconciled with an adequate defense.
The House balked first, in the early morning hours of April 28, when it boosted defense spending authority from the budget committee's recommended $116 billion to the Carter administration's $120 billion. In the process of changing the budget on the floor, the House so complicated the legislation that liberals (who wanted more social spending) and conservatives (who wanted more defense spending but a smaller deficit) combined to defeat the budget overwhelmingly and send it back to committee.
After shaking their fists at the White House for meddling in the sacrosanct budget process, the House leadership and House Budget Committee chairman Robert N. Giaimo (D-Conn.) fashioned a new budget that put defense spending at $117.1 billion - high enough to attract some moderate-to-conservative votes and low enough not to lose too many liberal votes, with the result that it passed the second time around in early May.
But House and Senate conferees took more than three days to iron out their differences, and the sticking point again was defense spending.
Even Sen. Pete V. Domenici (R-N.M.), a staunch supporter of congressional budgets, said he would rather see the new process break down than foresake the nation's defenses. Muskie said the Senate would not stand for spending less than $119 billion. Giaimo complained he would lose liberal support for the budget if spending went above $118 billion.
Eventually the conferees compromised at $118.5 billion in spending authority - most of which actually will be spent next year, but a good portion of which will be spent after 1978 - and the compromise first budget resolution passed both houses uneventfully.
The moral of the budget story, as House chairman Giaimo pointed out then, is that spending targets, although based in reality, may have several hundred million dollars of symbolism in them as well.
To an agency such as the Pentagon, which is expected to spend $110 billion or more next year and have the authority to spend or commit the government to spend more than $116 billion, $2 billion just does not mean very much in terms of its operations, Giaimo contended.
Few such symbolic debates occurred in the House and Senate Budget Committees in late July and early August as they put together their respective versions of the binding 1978 budget.
Congress hewed to the budget tenets it set down in the spring with the exception of agriculture - where farm bloc legislators horse-traced their support for some urban social programs such as food stamps in return for urban votes for higher price supports for corps.
In the resolution it sent to the floor, the Senate committee held farm spending to $5.6 billion and directed the Senate to redraw the spending levels set in the farm bill if it exceeds $5.6 billion. The process is called reconciliation. It is an avenue that Giaimo rejected on the House side, arguing that if the House knowingly votes to spend $6.1 billion or $6.2 billion on agriculture, it is a waste of time to lean against the will of the House when drafting a budget ceiling.
Senate observers expect the reconciliation directive to be taken out of the budget on the floor of the Senate, if the costs of the farm bill exceed the $5.6 billion in outlays the Senate budget contains for agriculture spending. In the first budget target, the House and Senate provided $4.35 billion for agriculture.
There are some differences between the Senate and the House on energy spending and budget authority. The House, for example, assumes that a two-cent-a-gallon gas tax will be enacted, while the Senate does not.
The House make allowance for changes in Social Security funding (providing $6.5 billion for this purpose) without specifying whether the funding should come from a tax boost or general revenues. The Senate committee assumes there will be no change in Social Security funding in fiscal 1978 - that is, if more monies are needed they will be transferred within the Social Security trust funds rather than coming from other sources.
The Senate is also less optimistic about the economy than either the House or the Carter administration. That means the Senate expects to have to spend a little more to finance programs such as unemployment compensation and to earn a little less in tax revenues than Carter on the House assume.
As a result, while the Senate and House are not far apart on spending, the House expects to generate more tax revenues than does the Senate.
In the aggregate, the Senate expects to spend $459 billion in fiscal 1978, collect revenues of $395 billion and run a deficit of $64 billion. The Senate committee voted total budget authority - which permits agencies to spend money in 1978 but also to commit the government to spend money in years after 1978 - of $501.2 billion.
The House Budget Committee approved a spending ceiling of $458.5 billion, revenues of $399.9 billion, a deficit of $58.6 billion and new budget authority of $509.8 billion.
President Carter, whose budget is not the actual federal spending agenda but a recommendation, proposed at his latest budget review on July 1 to spend $462.9 billion, raise revenues of $401.4 billion, run a deficit of $61.5 billion and have new budget authority of $504.3 billion. Budget Authority for Fiscal 1978 (in billions of dollars)(TABLE) (COLUMN)Congress(COLUMN)Carter(COLUMN)Senate(COLUMN)House (COLUMN)Target(COLUMN)Proposals(COLUMN)Committee(COLUMN)Committee 5-77(COLUMN)7-77(COLUMN)8-77(COLUMN)8-77 Defense(COLUMN)118.9 (COLUMN)122.3(COLUMN)116.6(COLUMN)115.8 International(COLUMN) 9.3(COLUMN) 8.8(COLUMN) 8.3(COLUMN) 7.9 Science(COLUMN) 4.9(COLUMN) 4.9(COLUMN) 4.9(COLUMN) 4.9 Natural Resources(COLUMN) 20.7 (COLUMN) 21.5(COLUMN) 24.9(COLUMN) 21.6 Agriculture(COLUMN) 2.2 (COLUMN) 2.0(COLUMN) 2.1(COLUMN) 2.1 Commerce(COLUMN) 20.0 (COLUMN) 19.4(COLUMN) 20.5(COLUMN) 25.4 Community Development(COLUMN) 8.2 (COLUMN) 7.3(COLUMN) 8.0(COLUMN) 8.1 Education(COLUMN) 26.8 (COLUMN) 21.0(COLUMN) 26.1(COLUMN) 26.7 Health(COLUMN) 47.9 (COLUMN) 47.2(COLUMN) 47.7(COLUMN) 47.7 Income Security(COLUMN)179.9 (COLUMN)184.2(COLUMN)178.8(COLUMN)186.8 Veterans(COLUMN) 20.25(COLUMN) 18.8(COLUMN) 19.9(COLUMN) 19.7 Law Enforcement(COLUMN) 3.7 (COLUMN) 3.8(COLUMN) 3.8(COLUMN) 3.8 General Government(COLUMN) 3.8 (COLUMN) 4.0(COLUMN) 3.8(COLUMN) 3.8 Revenue Sharing(COLUMN) 9.8 (COLUMN) 10.9(COLUMN) 9.6(COLUMN) 9.6 Interest(COLUMN) 43.0 (COLUMN) 41.7(COLUMN) 41.7(COLUMN) 41.7 Allowances(COLUMN) 0.8(COLUMN) 2.5(COLUMN) 0.9(COLUMN) 1.0 Offsetting Receipts(COLUMN)-16.3 (COLUMN)-15.9(COLUMN)-16.4(COLUMN)-16.8 TOTAL(COLUMN)503.45(COLUMN)504.3(COLUMN)501.2(COLUMN)509.8(END TABLE) Outlay Proposals for Fiscal 1978 (in billions of dollars)(TABLE) (COLUMN)Congress(COLUMN)Carter(COLUMN)Senate(COLUMN)House (COLUMN)Target(COLUMN)Proposal(COLUMN)Committee4(COLUMN)Committee (COLUMN)5-77(COLUMN)7-77(COLUMN)8-77(COLUMN)8-77 Defense(COLUMN)111.0 (COLUMN)113.0(COLUMN)110.1(COLUMN)110.2 International(COLUMN) 7.3 (COLUMN) 7.1(COLUMN) 6.6(COLUMN) 6.6 Science(COLUMN) 4.7 (COLUMN) 7.1(COLUMN) 4.7(COLUMN) 4.7 Natural Resources(COLUMN) 20.0 (COLUMN) 21.7(COLUMN) 20.8(COLUMN) 19.7 Agriculture(COLUMN) 4.35(COLUMN) 4.1(COLUMN) 5.6(COLUMN) 6.1 Commerce(COLUMN) 19.4 (COLUMN) 19.8(COLUMN) 19.6(COLUMN) 19.7 Community Development(COLUMN) 10.8 (COLUMN) 9.7(COLUMN) 10.4(COLUMN) 10.4 Education(COLUMN) 27.2 (COLUMN) 26.9(COLUMN) 26.4(COLUMN) 26.9 Health(COLUMN) 44.3 (COLUMN) 44.6(COLUMN) 44.2(COLUMN) 44.2 Income Security(COLUMN)146.7 (COLUMN)146.5(COLUMN)146.6(COLUMN)146.9 Veterans(COLUMN) 20.2 (COLUMN) 19.1(COLUMN) 20.1(COLUMN) 19.7 Law Enforcement(COLUMN) 3.85(COLUMN) 3.9(COLUMN) 4.0(COLUMN) 3.95 General Government(COLUMN) 3.85(COLUMN) 4.1(COLUMN) 3.8(COLUMN) 3.85 Revenue Sharing(COLUMN) 9.7 (COLUMN) 9.6(COLUMN) 9.7(COLUMN) 9.7 Interest(COLUMN) 43.0 (COLUMN) 41.7(COLUMN) 41.7(COLUMN) 41.7 Allowance(COLUMN) 0.9 (COLUMN) 2.4(COLUMN) 1.0(COLUMN) 1.1 Offsetting Receipts(COLUMN)-16.3 (COLUMN)-15.9(COLUMN)-16.4(COLUMN)-16.8 TOTAL(COLUMN)460.95(COLUMN)462.9(COLUMN)459.0(COLUMN)458.5(END TABLE)
The President and the Senate treat the income tax credit that exceeds liabilities as a revenue reduction, while the House treats it as an outlay. To make the House budget comparable to the Senate's and President's subtract $900 million from both outlays and budget authority and deduct $900 million from revenues. The $900 million should be added to the income security function. The House would then have total outlays of $457.6 billion, budget authority of $508.9 billion and revenues of $399.0 billion.