THEN PRESIDENT CARTER'S budget for fiscal 1980 goes to Congress next month, it will promptly plunge the administration into the wrong quarrel. The subject will be the president's repeated promise to hold the deficit under $30 billion. The trouble is that budget deficits are heavily influenced by changing economic conditions. Good times tend to reduce deficits, because demands for social insurance drop and revenues from taxes rise; conversely. bad times increase deficits. Mr. Carter's forecast for economic growth in fiscal 1980 is evidently going to be decidedly optimistic. Most other forecasts will be less cheerful than Mr. Carter's, and they will leave an implication that he is understating the proble deficit.
That, in turn, will turn the quarrel over budget policy into one over the administration's credibility and its veracity. It would be a great deal more sensible for everybody -- the people inside the White House, and the people outside -- to agree that forecasting is imprecise at best and that, if the economy tips into a recession next year, holding the derficit to $30 billion will be impossible in any case.
A better measure of presidential intentions is the spending total that the budget proposes. Spending is less sharply affected by the ups and downs of the business cycle than tax revenues are, and a president has more direct control over it. Mr. Carter has consistently declared that he will reduce federal spending in relation to the size of the national economy. But even that is going to be harder than it seemed a year ago.
The Carter administration's budget policy has, from the beginning, assumed much faster growth in jobs, incomes and investment than was likely or perhaps even possible. It's not merely an error in technical analysis. It's the painful process of reconciling this country to the unwelcome truth that it cannot sustain the growth rates to which it happily and quickly became accustomed in the 1960s.
For most of that decade, American wealth and output rose at terrific rates. That growth provided steady improvement in both private wealth and public benefits. But the expansion of public benefits continued and, in fact, even accelerated at the end of the 1960s, when the period of high growth was ending. The Nixon administration and a Democratic Congress collaborated in the fastest expansion in American history of federal benefits to citizens, notably pensions. At thesame time, there has been a rising tendency in recent years to use the federal budget to offset other things in the economy that have gone askew and diminished purchasing power -- above all, the unexpectedly large foreign-trade deficits, and the equally unexpected surpluses of state and local governments.
To hold down federal spending under these circumstances does not constitute a swerve to the ideological right, or a departure from established traditions of social responsibility. It only recongnizes that the United States can no longer count on a steady and rapid pace of economic expansion to keep financing new federal commitments. It also recognizes that the federal commitments. It also recognizes that the federal budget cannot safely be used indefinitely to offset everything else in the economy that may have fallen short or strayed out of balance.
Mr. Carter can't unconditionally promise a budget deficit under $30 billion, any more than he can promise that there will be no recession. He can only assure, over the next two years, continued caution and restraint on the outlay side of the budget as events unfold. The fiscal year 1980 will end a few weeks before a presidential election. By that time the final total for the budget deficit will be a rather secondary matter. What will really count then is the inflation rate, and the stability of American prosperity as people experience it in their own lives.