Is President Carter's tight budget really necessary?

That question is being raised by a growing number of old-line Democratic liberals this month as the administration prepares to submit its fiscal 1980 budget, and some analysts say the debate may well continue through the rest of the year.

Carter already has disclosed that he intends to send Congress a $533 billion spending plan designed to hold the deficit to below $30 billion by keeping outlays for most programs below what's needed to offset inflation. Officials admit this will seriously crimp key Democratic social programs.

The administration has tried to soften the blow by revamping major programs to target them to more needy groups -- in effect, to make them more efficient. But there still is no question that the spending levels will represent a cutback. The key word this year is "new realities." Translate that into cuts.

As Carter's advisers have portrayed it, the rationale for all this new-found austerity is that trimming the budget deficit will help combat inflation. Cutting federal borrowing will free money for other purposes. And bold action on the budget front could encourage business to hold prices down as well.

But as the impact of the president's budget cutting begins to take hold, liberals are questioning Carter's actions on two counts. They are asking whether it is politically sensible -- in the face of a possible recession -- to pledge obeisance to any specific budget figure at all. And they also are challenging the basic notion that reducing the budget deficit will have an impact on inflation. Liberals argue that the bulk of the recent price surge has stemmed from food and fuel prices, which aren't affected by budget cuts. So why cut the budget at all?

The debate over Carter's adherence to the $30 billion target is mainly a dispute over tactics. Congressional leaders fear that the coming recession might send unemployment benefits soaring, and that they will be blamed if Congress ultimately can't meet Carter's $30 billion figure.

Sen. Edmund S. Muskie (D-Me), chairman of the Senate Budget Committee, has called Carter's insistence on setting a target of $30 billion or lower an "over-preoccupation with a number." Muskie already has warned that if the economy falls into a recession, "all bets will be off" so far as Congress is concerned.

But the substantive question is more serious. The liberals argue here that budget cutting won't trim any more than a few tenths of a percentage point from the present 8 percent inflation rate, and isn't worth the social cost. Some say Carter has succumbed to the rhetoric of Wall Street and the dollar traders.

Program cutting already has sparked grumbling by traditional Democratic constituent groups -- although Carter seems for the moment to have held the griping in check. But the debate is bound to re-emerge -- both in and outside the administration -- after the budget actually comes out.

Will trimming the budget deficit really make much difference in fighting inflation? As with everything else, there's no clear answer in sight.

Economists say the liberals are correct that deficit cutting by itself won't take much off inflation -- only 0.2 to 0.3 percentage points by most estimates. And Wall Street admittedly is overdoing the importance of the deficit. The world doesn't hang on it, as some analysts would have it.

But there is consensus among a broad group of economists -- from conservative Republicans to mainstream Democrats -- that fiscal "austerity" is indeed necessary this year and that, merits of the program cuts aside, Carter has little choice but to hold spending down as tightly as he can.

The reasons range from pure old-fashioned politics to sophisticated economics.

To begin with, there's the political side. Although liberals may not agree with the premise, pollsters say the deficit is the most visible symbol of inflation to the majority of American voters. To muster nationwide support for any anti-inflation program, Carter virtually has to cut the deficit.

Even those with little faith in budget cutting view the political factor as important. Arnold H. Packer, a liberal who's the Labor Department's chief economist, cites the bloated deficit as having "the least intellectual respectability" of all, but "the most political credibility."

"My guess is that most Americans -- including a majority of the industrial and financial leaders of this country -- believe that a federal deficit is tantamount to running the printing press," Packer says, and then argues that, with that much at stake, paying attention to the deficit is crucial.

There is also the question of the deficit's impact on financial and credit markets. Although the $44 billion or so redink figure this year hasn't yet sapped much from would-be private borrowers, analysts say it's too high in today's high interest-rate climate.

Moreover, budget experts say many of the changes Carter is proposing could be justified as good management practices even under favorable economic conditions. The only question is whether Congress would approve them. And the best time to try that is when the budget deficit is an issue.

Most important, however, economists argue that the deficit must be slashed because the administration simply has to reduce the amount of government stimulus to the economy if it wants to avoid the overheating and excess demand that only would worsen inflation and scuttle Carter's wage-price guidelines program.

"The fact of the matter is, there is no way to lick this inflation without holding the economy to a 3 percent growth rate," says Otto Eckstein, a former Johnson administration economic adviser who now heads Data Resources Inc., a consulting firm. "And that means a period of austerity."

Although the administration may have to shift its policy if the economy falls into a recession, policymakers believe it's better to risk a mild recession -- which may not hurt much at all, in real terms -- than run the chance of adding significantly to the current inflation.

Whether Carter will be able to sell that point in the face of all the expected grumbling about cutbacks in individual programs remains to be seen. White House officials already have begun hitting home at all these points. And so far, the administration has been able to hold its own.

What Carter may find even more difficult to deal with, however, is his now-ironclad pledge to hold the deficit below $30 billion, no matter what. Admittedly, the president has to talk tough now to convince the doubters that he's serious about trimming the red-ink figure.

But if the economy falls into a recession, the $30 billion figure won't even have a chance. When the economy begins slumping, spending on welfare and federal unemployment benefits automatically rises sharply, and tax receipts fall off visibly -- bloating the budget deficit rather than reducing it.

And if the downturn deepens substantially, Congress will increase pressure to enlarge existing jobs programs and spend more on anti-recession aid. (Many analysts believe even Carter's present economic assumptions are too optimistic.)

Some analysts say this is all the more reason to trim existing spending programs to start with -- or at least make them more efficient. The feeling is that while holding down the budget may not be the great weapon the Wall Street curmudgeons say it is, it still is important -- and needed.

The consensus of a broad group of economists is that fiscal 'austerity' is indeed necessary this year.