Don't Muzzle Watchdog

ALL budget trims are not created equal. Some may actually lead to higher spending down the line.

Take, for example, the proposed cuts in the General Accounting Office (GAO), the investigative arm of the US Congress. Like most federal agencies, the GAO will have to endure its share of the ``recissions'' being doled out in the House right now. More worrisome is the prospect of a 25 percent slice in next year's budget for the agency, under consideration in the Senate.

The GAO doesn't seek immunity from the budget ax - it has plans for a 25 percent reduction by fiscal 1997. That would bring its staffing down to 3,975, the lowest level since the late 1930s, and its yearly budget down to $389 million.

The agency pleads for time to do the trimming more thoughtfully over a longer period of time, making use of the efficiencies offered by technology. Lopping off a quarter of its staff quickly would seriously undermine performance, it argues.

Given the importance of what the GAO does, its argument should be heard. It scrutinizes the spending of federal money in all corners of the country, and even abroad. It probes for fraud, whether in the use of food stamps or the dealings of weapons manufacturers. It checks the financial health of agencies with fiduciary responsibilities, like the Federal Deposit Insurance Corporation. Its recommendations led to the closing 1,200 field offices of the Agriculture Department and tighter controls on student-loan defaults, and they could have led - if they'd been heeded - to a much earlier response to savings and loan excesses.

The GAO urged a hard look at derivatives trading - long before Orange County or Barings hit the headlines.

By its estimate, the agency each year saves the federal government much more money than its yearly budget absorbs - ``tens of billions'' over the years. At a time of downsizing government, its expertise in tracing and evaluating the use of federal dollars may be more needed than ever.

For comparison's sake, consider that federal spending in the early 1960s - when GAO staffing was about at its present level - was $100 billion. It's now $1.5 trillion.

As a tool for checking where all that money goes and what it accomplishes, the GAO may be a bargain, even at its current budget.