The Gramm-Rudman-Hollings plan to cure the deficit by statutory means confounds all folk wisdom. Having watched one statutory process -- the so-called "budget process" of the 1974 Budget Act -- fail to overcome political pressures making for excess, Congress may enact yet another. The cat, badly burned, is poised to jump back on the same stove.

But panic has set in. The government is almost out of cash and to borrow more, Congress must boost the debt limit to just over $2 trillion, a figure of symbolic significance. It marks a near doubling of the national debt under Ronald Reagan, and another milestone on the dismal road once known (even to Reagan) as "mortgaging our grandchildren's futures."

To take the curse off this transition, Sen. Phil Gramm and several cosponsors have sprung a dandy plan on Congress. Whatever befalls it, it marks another fascinating episode in the bizarre chronicle of Congress' effort to boost itself, by statutory bootstraps, into fiscal self-discipline.

Gramm's bill is complex, but the aim is simple. It would "mandate" a scheduled reduction of the federal deficit, in $36 billion annual decrements, from some $200 billion this year to zero by 1991.

But in view of the well-known frailty of congressional will power, the plan would authorize the president, when Congress exceeds its own limits, to cut spending "across the board" (Social Security excepted).

What is remarkable is that in its embarrassment, Congress is disposed to cancel, at one hasty stroke, the Budget and Impoundment Act of 1974. That act aimed to retrieve usurped spending authority from the Nixon White House, yet now the Gramm-Rudman plan would give Ronald Reagan (and his 1989 successor) an unexampled one-man budgetary discretion -- possibly the most unbridled of its sort in any English-speaking legislative tradition since King Charles I lost his head.

In 1974, Congress had been battling Richard Nixon's abuses of "impoundment," executive withholding of appropriated funds, and the Budget Act of that year was intended to clean up congressional bookkeeping and reassert congressional dominance over the spending power.

The 1974 Budget Act and its "budget process" are now widely perceived as failures, and the judgment is hard to deny. The Budget Act halted impoundment abuses. But the "budget process" it instituted, despite a valiant try by people such as Ed Muskie, Pete Domenici and Jim Jones, proved powerless to curb overspending at a time of explosive inflation -- especially after the Reagan tax cuts lowered the revenue base. Legislative good intentions were not enough.

But what is the real lesson of this failure?

If the wreckage of the 1974 Budget Act suggests the intrinsic weakness of a statutory process in the face of overwhelming political and economic pressures, how can Gramm and his cosponsors contend with a straight face that still another, if different, statutory procilemma?

To be sure, if the country enjoys six years of cloudless economic sailing between now and 1991, the plan could work as intended.

In the unwelcome but highly probable event of recession, and the budget pinch it would bring, what then?

The Gramm-Rudman plan has an interesting escape clause. In the event of war or recession, the president may, at his discretion, waive the mandatory deficit reduction.

But putting a president in nearly total charge of the response to economic emergency not only repudiates the 1974 Budget Act; it may repudiate constitutional checks and balances as well.

How, then, would you bet in such an eventuality, in view of the history of such congressional self-denying ordinances? That Congress would swallow institutional pride, and ride out the politically chafing consequences of its abdication of power? Or (as it has done behind the facade of the "budget process") find sly ways to repudiate the deficit-reduction plan?

And another question: The rap against Richard Nixon, 15 years ago, was that he was impounding (we now call it "sequestrating") funds for political, not economic, ends -- using a discretionary power to destroy or cripple social programs Congress wanted to continue.

Would Ronald Reagan, made sovereign arbiter in an economic pinch, resist the temptation to use his extraordinary discretion under Gramm-Rudman to shape budget policy to suit his well-known fancies?

That is the most political, though not necessarily the most serious, of the many issues raised by the latest panacea for congressional indiscipline.