Budget Battles Loom As Lawmakers Return

THE reflecting pool glistens. The lawns beckon. The flower beds grow lush and fragrant. Gleaming in the late summer sun, the United States Capitol almost inspires poetry. Almost.

With a crowded docket of bills to cram through this fall and some serious points of disagreement, the newly returned members of the 104th Congress will be hard-pressed just to mold their vision of government into a readable script.

Republicans have promised tax cuts, welfare reform, a balanced budget, and curbs on entitlement programs like Medicare and Social Security. President Clinton, however, promises to make a few edits with his veto pen.

The ensuing struggle will not only test the powers of the new Republican majority but will also challenge the two presidential front-runners, Senate majority leader Bob Dole (R) of Kansas and Mr. Clinton, who must appear to stand firm on principle without gumming up the works.

On trial, too, will be America's two-party system. With voter disillusionment high, party loyalty low, and public support for reform widespread, the consequences of gridlock are perhaps taller than ever.

''I'll be glued to C-Span with my nails dug into the couch,'' says David King, a congressional scholar at Harvard University's Kennedy School of Government. ''It's going to be fun to watch.''

Here in Washington, dire predictions abound. In order to prevent the government from shutting down on Oct. 1, Mr. Clinton and the GOP Congress have to agree on each of 14 spending bills that make up the federal budget: bills regulating everything from taxes and entitlements to prison spending and farm subsidies.

Opinions differ on whether a logjam will occur. So far, it seems likely: The House still has two appropriations bills left to consider, the Senate has seven, and Clinton has threatened to veto several bills that he considers too damaging to the environment, education, or the poor.

''I don't expect sudden cooperation,'' Dr. King says. ''I think there will be gridlock ... and it will unleash fresh hatred for politicians generally and Congress specifically.'' The result, King says, will likely be a surge in voters joining the third-party chorus.

Other disagree. ''Americans have short memories,'' says former Republican Rep. Mickey Edwards, now a Harvard professor. ''For years, we've always had a 'train wreck' looming, no matter who is in the White House and who controls Congress. This year, it's to both sides' advantage to push it to the edge, and that's what they're going to do.''

By all accounts, the upcoming session will be contentious. One reason is presidential politics. Senator Dole and Clinton are enmeshed in campaigns. Likewise, Texas Sen. Phil Gramm (R), one of three other senators seeking the GOP nomination, will spar with Dole over welfare reform.

To complicate matters, Congress has inherited a legislative weapon almost as lethal as Clinton's veto. By coincidence, the total amount of federal debt is approaching the $4.9 trillion ceiling imposed by Congress. By some estimates, the debt could surpass this as early as Nov. 15, at which point Congress must vote to raise the ceiling or risk defaulting on government securities.

Congressional leaders have threatened to tie the debt-ceiling adjustment to the largest spending bill - the budget reconciliation bill - which governs taxes and entitlement spending. Hence, if Clinton vetoes the GOP bill, the government will go bankrupt and the world's financial markets could be thrown into chaos.

But even if the debt-ceiling threat rings hollow, the budget process will still be more nettlesome than ever. In a break from tradition, Republicans have used the appropriations bills to eliminate programs and cut the power of offices like the Environmental Protection Agency. During their 40-year dominance of Congress, Democrats never made such drastic changes without hearings. The upshot is: These bills are more significant, and thus more prone to vetoes, than ever before.

And there's another problem. As Professor Edwards points out, the first- and second-term Republicans in the House have shown a propensity to buck the leadership when they feel it isn't progressing fast enough. Even if Dole and Speaker Newt Gingrich are inclined to strike a deal, these eager government-shrinkers could revolt anew, adding to the gridlock.

On top of this, Sen. Bob Packwood, the Oregon Republican, is calling for public hearings about his alleged sexual misconduct.

So can Congress cope? Former Rep. Bill Frenzel (R), now with the Brookings Institution, says that even if the much-ballyhooed ''train wreck'' occurs, ''there will be few permanent casualties.''

For his part, Clinton has already announced his ascension to the broadest points of the GOP Agenda: a balanced budget, welfare reform, tax cuts, and curbs on entitlement spending.

The devil is in the details. Republicans want to balance the budget in seven years; Clinton suggests nine. Republicans want to reduce Medicare outlays by $270 billion over this period, while Clinton would trim them by half as much. The two sides are also $140 billion apart on the proper size of a tax cut.

These substantial and fundamental reforms, unheard of just a few years ago, are also taking place at a time when cynicism about ''politics as usual'' is rampant in America, and politicians from both parties are describing politics today as ''mean-spirited'' and ''broken.''