The chairman of the House Budget Committee, frustrated over congressional budget-busting, threw his weight behind legislation that would limit federal spending and tax-break programs to a percentage of the gross national product.
The move by Rep. Robert N. Giaimo (D-Conn.) was expected to give added impetus to the legislation, which is scheduled for consideration later this week by the House Rules Committee, Sponsors say a floor vote now is likely early next year.
Giaimo's action in embracing the legislation was aimed at repairing the crippled congressional budget process and at heading off a possible constitutional amendment that would require Congress flatly to balance the budget.
The chairman's proposal parallels a bill by Rep. James R. Jones (D-Okla.), which would force the lawmakers to hold outlays each year to a specified percentage of GNP, which is the market value of all goods and services the nation produces.
However, Giaimo's bill also would impose a similar percentage limitation on tax expenditures and federal loans and loan guarantees, which have been proliferating in recent years in part as a device to get around spending ceilings.
A tax expenditure is a tax credit or other tax break aimed at a particular industry or group rather than all individuals or businesses. Example include the deduction for home mortgage interest and the business investment credit.
House Budget Committee estimates show tax expenditures now are draining $169.8 billion a year in revenues that otherwise would be available for other programs, while loans and guarantees now total $391 billion -- both up from last year.
Giaimo's legislation would limit the combination of overall spending and tax expenditures to 28.5 percent of GNP in fiscal 1961, 28 percent in fiscal 1982 and 27.5 percent in fiscal 1983.
The specific limit for federal loans and loan guarantees would be established separately by Congress as part of its annual budget resolution, which now sets targets for spending and tax receipts. The procedure would begin in fiscal 1982.
The portion of Giaimo's bill dealing with tax expenditures and loan guarantees was drafted by Rep. Norman Mineta (D-Calif.), who heads a Budget Committee task force that has recommended similar legislation.
Jones, whose spending-limit measure now has 50 co-sponsors in the House, yesterday endorsed Giaimo's version of the measure in principle, but whithheld comment on the specifics until he has studied them further.
In announcing his proposal yesterday, Giaimo told reporters he had been frustrated by the failure of House members to hold spending down tightly enough in the last budget resolution, and was convinced the process needed strengthening.
Giaimo's sponsorship of the Jones and Mineta proposals yesterday marked the first time that the Democratic congressional leadership has shown support for such a move. House leaders want to head off a flat constitutional amendment.
However, it was not clear immediately whether the bill would win the support of other key congressional figures, including Sen. Edmund S. Muskie (D-Maine), Senate Budget Committee chairman, and Sen. Russell B. Long (D-La.) of the Finance Committee.
Giaimo said the ceiling set by his legislation limiting outlays and tax expenditures to 28.5 percent of GNP in fiscal 1981 compared to 28.4 percent, for fiscal 1980. Federal outlays totaled less than 19 percent of GNP in the 1950s and early 1960s.
Although Muskie was not available for comment yesterday, he has opposed in past years any measures that employed a formula to decide limits on spending. And Long has complained that the budget process already is impinging on his committee.
Giaimo said he decided to support the Jones-Mineta approach after the budget resolution became embroiled in a stalemate this summer and autumn between liberals and conservatives who were fighting over defense spending.
The two sides finally worked out their differences, but only after delays that held the fiscal 1980 budget resolution some two months past its Sept. 15 deadline. The fracas was regarded as a setback for the budget process.
Giaimo, Jones and Mineta were joined yesterday in their support of the legislation by Reps. Leon Panetta (D-Calif.) and Ralph Regula (R-Ohio). Regula said he expected strong Republican support for the measure.