Suddenly everyone is talking about a possible federal spending "freeze" as a way to cut next fiscal year's budget deficit.
The notion sounds altogether fair, marvelously simple, powerfully effective.
But "freeze" is a deceptive word. "One man's freeze is another man's thaw," one Senate budget aide said wryly.
Most people don't want to freeze the whole budget, just part of it, and almost everyone wants to exempt a different part. It may not even be legally possible to freeze it all.
Rep. Newt Gingrich (R-Ga.), who raised the issue with President Reagan last week, wants "pretty much an across-the-board freeze for the next two years" in outlays, a freeze so comprehensive that spending would rise very little during fiscal years 1984 and 1985 from this year's estimated $860 billion. Gingrich would include defense spending.
President Reagan's advisers seized upon the idea with its apparent simplicity and fairness in hopes that they could convince a reluctant chief executive to accept reductions in his planned defense buildup as part of a deficit-reduction program.
It also would eliminate for a year all federal military and civilian pay raises and cost-of-living adjustments in all federal retirement and entitlement programs such as Social Security.
Any Reagan administration proposal--assuming the president goes along at all--apparently would be much less sweeping than the one offered by Gingrich. Noted one official involved, "It wouldn't exactly be a freeze, but it would come out looking a lot like a freeze."
Sen. Ernest F. Hollings (D-S.C.) has been pushing his version of a spending and tax freeze for more than a year. Hollings, like Reagan's advisers, would eliminate federal pay and retirement increases and Social Security cost-of-living additions for a year.
But he would exempt from the freeze food stamps, Medicare, Medicaid and so-called supplemental security income payments--welfare for the elderly, blind and disabled--on grounds that "people on these programs have sacrificed enough already.
He would also make an exception for defense. "Freezing defense means that we limit ourselves to the 3 percent real growth commitment made to NATO," Hollings has explained. An increase in defense spending of 3 percent more than the rate of inflation for defense purchases, of course, is a long way from a freeze, even though it would mean a much smaller increase than Reagan favors.
Up close, the idea of a freeze turns out to be neither simple nor necessarily fair. "I would be happy to agree to a freeze if you let me write the details," a liberal House Democratic aide declared, mindful of these complications.
Some parts of the budget cannot be frozen without abrogating basic commitments that no one would consider changing. Two examples are interest due on the federal debt and the payment of initial Social Security benefits to newly retired recipients.
Gingrich acknowledges that even his version of a freeze would have some warm spots, such as for new retirees, and that federal spending would continue to rise somewhat despite the restrictions. But he is convinced that interest payments would fall because his program would reduce federal borrowing and the level of interest rates.
The Georgia congressman, who came up with his idea after a long talk with Office of Management and Budget Director David A. Stockman at the White House Christmas party last month, would leave some spending flexibility by freezing not the budgets of individual agencies and departments but broader budget categories.
These might be the so-called functional categories--national defense, education, health and so on--in the budget itself. The spending for a particular function would be frozen but dollars could be shifted among programs under that heading.
A true freeze could produce an immense headache for Pentagon officials, who routinely commit the Defense Department to multiyear contracts for weapons systems and other items. Tens of billions of dollars the department will pay out in fiscal 1984, for instance, will have been committed in 1983 or earlier years.
Thus, a true freeze could force the Pentagon to slow its pace of procurement under current contracts, or perhaps cancel them, with the payment of large penalties, budget authorities noted. Other departments could face the same problem but on a lesser scale.
The less sweeping the coverage of a freeze, the more difficult it likely would be to describe its terms and the more difficult politically it would be to refuse to add this or that exemption, congressional Budget Committee sources said. Past freeze proposals have unraveled this way.
Unemployment benefits would be hard to freeze, though an expected decline in unemployment could take care of that. Medicare would present another problem.
"Freezing Medicare would not impose a freeze on the bills hospitals give out," said an official at the Congressional Budget Office. "Would you have the sick pay a higher proportion of their bills? That would be one way to do it" but not a politically likely one, he said.
Coincidentally, a freeze might even mean a smaller spending cut in some programs than the administration might favor. Last year Reagan proposed about $9.5 billion worth of cuts for fiscal 1983 in so-called discretionary domestic spending programs. That category included just about the entire budget other than defense, retirement and other entitlement programs and interest on the debt.
Some members of the Senate Budget Committee sought instead to freeze such programs, which would have meant a cut of $5 billion to $5.5 billion, a committee aide said. In the end, Congress decided to trim such spending by about $3.5 billion.
Some economists are wary of a freeze because they do not want to make really large spending cuts in fiscal 1984, when by most forecasts the unemployment rate will still average nearly 10 percent. They fear that deficit reduction in that year could hurt, rather than help, the economy.
Gingrich, on the other hand, argued that a two-year spending freeze would send such a strong signal to financial markets that the stimulative effect of lower interest rates would be greater than the depressing effect of lower spending.
While many economists disagree with that analysis, most of them say they believe that federal deficits in later years must be reduced to make room for private investment as the economy recovers. A one-year freeze could contribute to that goal because in some instances, such as for most entitlement programs, the savings from the first year would recur and grow each subsequent year.
But a House Democratic aide expressed doubt that Congress would back a freeze that postponed Social Security and other cost-of-living increases for a year. "There is just no support for that at all," he said.