So what if Congress doesn't adopt a budget?

The possibility came into focus last week when House and Senate negotiators broke up their discussions on a fiscal 1986 budget in a flurry of finger-pointing.

If the stalemate continues, Congress may lose its best vehicle for achieving the sweeping deficit reductions it set out to make six months ago. Along with that, say members of both parties, Congress would send a powerful signal to the financial markets and reinforce public skepticism about its ability to bring spending under control.

"The general tone that Washington can't govern will get worse," said Rep. Mike Lowry (D-Wash.).

But the real impact on spending, deficits and the economy is less clear.

Even without a budget package, Congress will set spending limits by passing normal appropriations bills. But the goal of cutting $200 billion deficits by half over the next three years would probably disappear without the enforcement mechanisms built into the budget process.

In addition, many of the controversial cuts in domestic spending programs that might be politically acceptable under the protective cover of an overall budget bill could easily fall victim to political pressures when considered separately.

Despite all these problems, Congress could yet enact savings that would take it halfway toward its targeted fiscal 1986 savings, some of the politicians involved say, in part because Pentagon spending is likely to be scaled back from President Reagan's initial request of 6 percent growth after inflation.

Sen. Slade Gorton (R-Wash.), a budget negotiator, predicted savings next year of $35 billion, mostly from defense, compared with $56 billion under both Senate and House versions of the budget. But he said that few if any additional savings could be achieved for future years.

One of the ironies of budget politics is that defense, which profited so enormously by the shuffling of spending priorities the past four years, is now suffering from a reverse spin as the Pentagon presents a more attractive target for spending cuts than many already well-plucked domestic programs.

With or without a budget package, cutbacks in the military buildup are on track toward enactment in the authorization bill now in conference and the appropriations bill that will come later. Military spending will increase, but at nowhere near what Reagan requested.

None of the targets under consideration in Congress contemplates increasing Pentagon spending authority beyond what is necessary to keep pace with inflation, and outlay savings next year are $20 billion higher than the level the administration projected last year.

Among domestic programs, separate legislation reauthorizing Medicare and farm programs could produce substantial savings in spending. Other smaller authorization bills are being fashioned with an expectation of budget restraints, and a federal workers' pay freeze is possible without a budget.

House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) and Senate Majority Leader Robert J. Dole (R-Kan.) have vowed that if a House-Senate budget compromise proves beyond reach, each house will keep its appropriations bills within its own version of the budget.

But that's more encouraging than it sounds. For one thing, domestic discretionary spending that is governed by appropriations is a small and shrinking part of the budget, about 15 percent.

Further, the Senate in particular has little in the way of institutional constraints on spending without enforcement leverage that the budget affords. And rules that apply to the two houses separately carry little weight with conference committees.

The problem of trying to enforce discipline through appropriations is illustrated by the Senate's apparent love-hate relationship with the Economic Development Administration. Not long after it voted to kill EDA in its budget, the Senate added $30 million to a supplemental appropriations bill for the rest of this fiscal year to finance three EDA projects in Senate Appropriations Committee members' states.

The House can be creative too. On measures such as food stamps, it has been known to finance programs for less than a year to come within budget ceilings, only to come back later for further funds in a supplemental bill.

When it comes to appropriations, there is "simply no threshold for hypocrisy," a congressional budget staff member observed.

Finally, Reagan can be expected to renew his campaign of veto threats, which has an effect in restraining congressional spending even if the veto is never used. In an early warning shot, presidential spokesman Larry Speakes said Friday that Reagan was "sharpening his veto pen."

But even the Republican Senate is sharply divided over expanding the presidential veto power along lines that Reagan wants. For three days last week, Appropriations Committee Chairman Mark O. Hatfield (R-Ore.) filibustered a line-item veto bill -- calling it "constitutional madness," among other things -- and the Senate refused to shut him off.

Despite repeated snarls and stalemates, Congress has always passed a budget, although it did so last year almost after passage of most of the rest of its business. There are many who believe this year will be no exception.

But if there is no compromise, the "poisoned" atmosphere between the House and Senate is likely to affect upcoming legislation, lawmakers say.

That could mean trouble for appropriations bills, forcing them into an omnibus "continuing resolution" to finance unappropriated programs after the start of the fiscal year Oct. 1 -- the "first trillion-dollar continuing resolution," as one wag put it.

And it could clog the channels for such business as the president's tax plan, which some lawmakers would like to hold hostage for passage of deficit reductions.

Some lawmakers believe Congress must agree on a budget before its summer recess begins Aug. 2. Others hold out hope that during the recess angry constituents will light fires for a stronger deficit-reduction effort, including tax increases.

"But do they care?" asked Sen. Lawton Chiles (D-Fla.), ranking Democrat on the Senate Budget Committee and author of a deficit reduction package. "I'm not at all sure they do."