ORTHODOXY TRIUMPHS in President Carter's budget. The author has abandoned some of his campaign promises - the less wise ones, we'd say - and has produced a document of earnest competence. It contains no surprises, other than perhaps the surprise that a President in his first budget should have struck so close to past practice.
His basic decision here was the customary one of using the budget to maintan a mild but steady pressure for growth in the national economy as a whole.
The idea is to make the economy expand fast enough to create jobs just a little faster than the working population increases, in order to keep shaving the unemployment rate down. Once a President accepts that strategy, the general outlines of his budget follow from it.
Mr. Carter will doubtless find himself embroiled with some of his own party over the increase in military spending. There are good many people in politics, most of them Democrats, who consider the present scale of the defense budget to be a national bad habit that, like smoking, could be broken by a firm exercise of willpower. Mr. Carter joined that side of the argument during the campaign but, in office, he has discovered that another logic governs defense. It is possible to debate the reasons why the Soviets began rapidly increasing their own defense budgets several years ago, but it is indisputable that those increases are a serious matter. If the United States were now to cut its support for its conventional forces, the effect would be to increase its reliance on its nuclear weapons. But Mr. Carter correctly judges it more urgent to pursue agreement on the limitation of strategic armaments. The price of progress on nuclear weapons includes, for the present, some expansion of spending on other kinds of arms. In this case, Mr. Carter is entitled to congratulations for abandoning a campaign promise.
The greatest area of increase in this budget is, once again, in the pensions - above all, Social Security - and the medical care that accompanies them. Out of a total budget next year of $500 billion, $140 billion would go to pensions and another $30 billion to Medicare for the elderly. The great change overtaking the federal budget in this generation is the rapid assumption of financial responsibility for the retired and the disbled. This budget reflects that long trend.
People sometimes ask why it now takes a deficit of $60 billion a year - a figure spectacularly large by any standard previous to 1975 - to keep the economy growing at a moderate rate. What's going on here? The administration replies that the 1974-75 recession was extremely severe, and requires strong remedies. But there's more to it. The theory holds that the federal budget is used to compensate for excesses or, as in the current situation, shortfalls sof demand elsewhere. One notable new factor is the tremendous American trade deficit, due entirely to oil imports, that funnels purchasing power out of this country. The budget deficit is being used to offset, among other things, the oil deficit.
Budget rhetoric is a staple of political campaigns. But if you lay out the budget numbers, year by year, it is impossible to tell from them which party was in power. The Nixon years were charaterized by a reduction in a real defense spending, with the end of the Vietman war, and by extremely rapid increases in direct federal payments to people through Social Security and similar benefits. The Ford budgets were overwhelmed by the worst recession since the 1930s. Now Mr. Carter comes along, at a time of uncertain recovery in this country and, in the world economy, deep structural changes that have not yet been fully charted. He has evidently decided that fiscal year 1979 will be no time to depart from the security of established pratice.