The Senate yesterday voted to revitalize the law requiring systematic reductions in the federal budget deficit but defeated a move backed by many Democrats to impose tougher deficit targets and require deeper automatic spending cuts if the government misses those targets.
On a 71-to-21 vote that may strengthen its position going into what are expected to be tough negotiations with the House, the Senate added a new automatic spending-cut mechanism to the Gramm-Rudman-Hollings deficit-reduction act to replace the one invalidated by the Supreme Court last year. The amendment, which is designed to reinvigorate the balanced-budget law, was attached to legislation raising the federal debt ceiling to $2.8 trillion through May 1989.
The Senate approved the debt-limit extension last night on a 54-to-31 vote after defeating a series of other budget-related amendments. An attempt to repeal the $12,100 congressional pay raise was killed on a procedural vote, though senators did agree to require recorded votes on future salary increases.
During a debate rich with irony, some Democrats criticized the amendment to Gramm-Rudman-Hollings for requiring relatively mild cuts in the deficit in the first two years and delaying the tough choices until after President Reagan has left office.
"This amendment really takes the White House off the hook," said Sen. J. Bennett Johnston (D-La.), an avowed opponent of Gramm-Rudman-Hollings who nonetheless pressed for more stringent deficit objectives and automatic spending cuts. No Republicans supported Johnston's amendment, which was defeated, 52 to 41.
Johnston suggested that some Republican proponents of the prevailing amendment were supporting less burdensome deficit targets in order to shield Reagan from the difficult choice of accepting either higher taxes or deep cuts in his defense budget. Democratic leaders, in a reversal of form, have wholeheartedly embraced a tougher deficit law this year to box the president into that choice.
Republican senators, in turn, accused Johnston of trying to prevent repair of Gramm-Rudman-Hollings' automatic spending-cut feature under the guise of pushing for stronger medicine.
"We've bitten off all we can chew given that we have to go to conference with the House and have to get the president to sign it," said Sen. Phil Gramm (R-Tex.). One of the Senate's most vociferous opponents of government spending and the lead sponsor of the deficit-reduction law, Gramm led the fight against Johnston's proposal for stricter deficit targets.
The Gramm-Rudman-Hollings change adopted by the Senate is a compromise fashioned by conservative Republicans and the Democratic chairman of the Budget Committee after neither could get their competing plans passed last week.
It extends by one year, until fiscal 1992, the spending period in which a balanced federal budget is to be achieved and sets a new deficit target of $150 billion for the fiscal year that begins in October. That is about $36 billion lower than the current estimate of what the deficit would be without changes in current spending and tax policies, and relaxes by $42 billion the existing target of $108 billion.
The change appears to dovetail with the fiscal 1988 budget adopted by Congress, which also calls for reducing the deficit by $36 billion next year, $19.3 billion of it through unspecified higher taxes.
However, because the amendment also allows for $10 billion of "slippage," Congress and the White House might actually have to reduce the deficit in fiscal 1988 by just $26 billion or possibly less.
Johnston and his supporters argued yesterday that the deficit-reduction requirement could fall below $10 billion if the president's Office of Management and Budget changes its projections of the economy's performance. Anticipated deficits have much to do with projected performance -- which affects such factors as tax revenues and outlays for programs such as unemployment insurance.
If the projections are that the economy will do better than earlier anticipated, Democrats said that would mean Reagan might dodge the tax issue that they want him to confront.
"OMB is going to cook the numbers again," predicted Johnston, whose amendment would have lowered the fiscal 1988 target to $140 billion and guaranteed a minimum first year reduction in the deficit of $36 billion. "This is a way to avoid the taxes."
Budget Committee Chairman Lawton Chiles (D-Fla.) insisted, however, that congressional negotiators could prevent OMB from skewing the economic assumptions and that the compromise plan would significantly reduce next year's deficit.
But the chairman of the House Budget Committee, Rep. William H. Gray III (D-Pa.), also harshly criticized the Senate's action yesterday. He predicted that if the Senate prevails in a conference that will begin next week, "We will get virtually no deficit reduction in the fiscal 1988 budget."
The Senate proposal, added Gray, "essentially gives Ronald Reagan a free ride on deficit control and pushes the problem onto the next president. This proves what we've suspected, that Republicans are not serious about deficit control while President Reagan is in office."