Senate pushes constitutional cage for US budgets

President Reagan is trying to lasso runaway government spending. Back on Capitol Hill, some congressmen want to build a constitutional cage to keep the wild animal from ever running free again.

Recently, the Senate Judiciary Committee approved a proposed constitutional amendment to balance the budget. Over the years there have been many such attempts, but none has ever progressed so far.

Backers of SJ Resolution 58 say it will trap the bloated federal budget for good. "The outcome of the November election was a mandate that we do more than just talk about balancing the budget and limiting taxation," said Sen. Orrin G. Hatch (R) of Utah, a joint sponsor of the resolution. "This amendment puts teeth into talk."

Critics say it could lock up America's future and throw away the key. "Such an amendment is unworkable and unwise," says a staff employed by a congressman opposed to the move.

Back in 1965, federal spending accounted for 17.9 percent of America's gross national product. Feeding on larger and larger deficits, the budget grew to 22. 6 percent of GNP by 1980.

The real aim of the amendment, its authors say, is to stop this tendency of government spending to take over a growing share of America's economy.

"It's a lot more sophisticated than it looks on the surface," says economist Milton Friedman, a sponsor of the National Tax- Limitation Committee, which drafted the resolution.

The amendment would require Congress, each year, to adopt a balanced-budget statement. A three-fifths vote of Congress could override the statement and authorize temporary budget deficits. And the "income" side of the government's ledger could grow no faster than the national income, under the resolution.

Linked together, these provisions would help stop the government from becoming a larger presence in Americans' lives, according to proponents. And they say it's what the electorate wants.

In 1979, 73 percent of those polled in a CBS/New York Times survey favored a constitutional amendment balancing the federal budget. State legislators in 30 of the necessary 34 states have voted for Congress to call a constitutional convention to consider the change.

But not everyone thinks a cage for government spending is a good idea. Testifying before a House subcommittee in 1979, economist Paul Samuelson said: "A constitutional amendment cannot by its nature provide the flexibility for future governmental policy that is necessary in so imperfect a science as economics."

At the same hearing, Arthur Burns, former chairman of the Federal Reserve Board, said this problem could be avoided by designing the cage with some escape hatches -- such as the congressional override provided for in SJ Resolution 58.

Others worry that Congress, always ingenious when it comes to spending money, would simply find ways to help federal spending escape from its constitutional jail.

"It would create incentives for monkey business," says Henry Aaron, a Brookings Institution economist.

Loan-guarantee programs, with no mandated outlays, might suddenly multiply. Spending might be shuffled into the never- never land of off-budget financing -- despite aspects of the amendment designed to prevent the move.

And if the amendment becomes law, who would be the jailer? A study conducted for the House Judiciary Committee questioned how such a resolution could be enforced without granting the president broad impoundment powers or creating new and clumsy congressional procedures.

"In the end, the enforcement issue would probably wind up in the courts," committee chairman Peter Rodino (D) of New Jersey said recently, "thus effectively giving the judicial branch control of the federal budget."

A constitutional cap on government spending might also cause a shift in government spending priorities -- forcing Congress to take a harder look at potentially uncontrollable "entitlement" programs than it did this year.

"How did we get along without food stamps for 200 years?" asks Dr. Craig Stubblebine, a director of the National Tax Limitation Committee, who helped draft the proposed amendment. "Can we do without these programs? Our history suggests so."

Critics contend such an amendment might become, in the end, ideological posturing unsuited for the Constitution -- "rhetorical clutter," in Mr. Rodino's words.

The issue of a balanced budget "doesn't seem to rise to the level of a constitutional question," Dr. Aaron says.

While agreeing that the budget must be brought under control, Federal Reserve chairman Paul Volcker said recently that Congress should try legislation before trying to amend the constitution.

"In this way, unforeseen problems could be identified before the more profound and less easily reversed step of amending the Constitution is considered," Mr. Volcker said.

The amendment's backers counter that Congress has failed repeatedly to pass such a bill. The Constitution was designed to constrain the behavior of government, they say, and financial restrictions are valid and necessary.

"Congress has been behaving in ways a sizable number of people believe is inappropriate," Dr. Stubblebine says.

In the end, according to members of the National Tax Limitation Committee, such an amendment is needed to protect Americans from themselves. A committee press release quotes historian Alexander Tytler, writing in 1787:

"A democracy can only exist until the voters discover that they can vote themselves largesse from the public treasury. The majority always votes for the candidate promising them the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal pol icy. . . ."