CONGRESSIONAL IDEAS about the federal budget have changed drastically over the past year, and you can see the results in this week's debate in the Senate. The first draft of the budget resolution has come to the floor, with its stringent limits to next year's federal spending and deficit. A majority of the senators now seem to accept the principle of a balanced budget as political imperative-for the first time since the Eisenhower years-and the only question is how fast to get there.
Sen. Muskie's Budget Committee is recommending a resolution that would commit Congress to a balance in fiscal 1981-the fiscal year that begins five weeks before the next election. This drive toward balance is particularly remarkable since the Budget Committee warns that a mild recession is likely later this year. It's the first time in at least a generation that leading senators of both parties have been talking about cutting a president's budget in the face of rising unemployment.
It's not the Senate alone. A similar, if slightly less draconian, resolution comes to the floor of the House next week. The rest of the year is going to filled with bitter quarreling over who's to bear the brunt of the cuts-whether the poor, or the states or the Pentagon.But the main mechanism moving the budget toward balance is not the cuts in spending. It is the automatic and continuous tax increase that inflation imposes by moving taxpayers into higher brackets.
With cruel and explicit logic, the Senate Budget Committee warns that, if the budget is to reach balance before next election day, Congress will have to forego the expected pre-election tax-reduction bill. Conversely, if Congress wants to enact tax relief next year, the balanced budget will have to wait until 1982. There's a certain mean irony to this point, since the balance-the-budget movement is drawing a lot of its support from people who think that it necessarily will bring lighter taxes.
For the 30 years after World War II, most people just assumed that the ultimate purpose of economic policy was to generate jobs and keep unemployment low. It was a social and moral judgment that had a wide consensus behind it. But recently, after six years of inflation unprecedented in this country's experience, that view has been changing. If Congress enacts a final budget resolution next September that is anything like the present drafts, it will have moved to a very different position.It will be saying that it finds an inflation rate of 10-plus percent more dangerous to American society than an unemployment rate around 6 percent and fairly stable. It will also be acknowledging that temporary stagnation in the economy is preferable to a permanent balance-the-budget amendment in the Constitution.
Congress would be right on both points. But as the economy slows and federal funds become less lavish, the burdens will not fall equally on all citizens. Speaking of morality, it is important to remember that those who benefit most from lower inflation will not necessarily be those who are out of work. The two budget committees have tried to provide more help for the people most at hazard, and that concern needs to be preserved in the hard bargaining ahead.