CONGRESS PASSED the Gramm-Rudman amendment last year to force itself and the president to deal with the great soft spot in economic policy, the deficit. The requirement was that, for the first time in this administration, the two branches either finance the full span of government activity or cut it, defense as well as domestic programs. Now a three-judge panel has set aside as unconstitutional part of the forcing mechanism in the Gramm-Rudman process. The case next goes to the Supreme Court; what if the panel, which stayed its order pending appeal, is upheld? It needs to be remembered that a fair amount of the Gramm-Rudman mechanism will remain.

The deficit this fiscal year is expected to be a little over $200 billion. Gramm-Rudman set up targets to bring it down to zero in the next five years. It then set up a procede under which the heads of the Office of Management and Budget, Congressional Budget Office and General Accounting Office would 1)decide each fall whether the president and Congress had hit their target for the fiscal year ahead and, if they hadn't, 2)produce a list of spending cuts for the president to promulgate to bring the deficit to the desired zone. Congress said there were to be no cuts in some programs (Social Security, most forms of aid to the poor) and only limited cuts in some others. The rest it said should come half-and-half and pretty much across the board from domestic programs and defense.

The procedure was challenged as a blurring of the separation of powers. The challengers, led by Rep. Mike Synar of Oklahoma, said on the one hand that Congress was delegating too much authority to the executive branch, on the other that the head of GAO was being made to perform an executive function even though he is a creature of the legislature. The panel -- U. S. Court of Appeals Judge Antonin Scalia and district judges Norma H. Johnson and Oliver Gasch -- said the procedure was valid on the first count but a violation on the second.

But Gramm-Rudman anticipated this, and contains a fallback procedure. The targets would remain; the directors of CBO and OMB would still decide each fall whether the target for the year ahead had been attained, and if not, produce their list of cuts. Instead of going to the head of GAO to be sent to the president, the list would go to a new joint committee of Congress. The committee would then put the cuts before both houses within five days (and any measure they agreed to -- the CBO- OMB list, a man-made alternative, a mere further declaration of their good intentions -- would go to the president for veto or signature, just like any other legislation).

Of course they could dodge. They always can, and this is an election year besides. All that a budget procedure can do is make the dodging harder. Gramm-Rudman s a little further; it contains some rules of thumb. The deficit next fiscal year should be below $150 billion; poor people's programs should not be cut unless Social Security is too; and absent a tax increase, the necessary spending cuts should come about half from defense, half from domestic programs. Those decisions were right when Congress made them in December. They still are.