(4 of 5)
Then came the political commitments. Reagan had repeatedly promised that he would not cut Social Security, so Social Security would have to be exempted too, and he also exempted military payrolls. As this kind of budget-eve bargaining agitated Washington last week, it was clear that the oysters with the strongest political power would indeed escape injury--at least in the first round--but other cuts would then have to be correspondingly deeper.
Senator Pat Moynihan asked Comptroller General Bowsher, at a hearing last week, whether the various exemptions did not mean that the vulnerable areas of domestic spending will actually have to be slashed by a devastating 25% next year and vulnerable defense outlays by perhaps 18%. "That's in the ball park," said Bowsher, thus conjuring up a ball park stripped of seats, gates and outfield fences.
Last week's negotiations are nothing, however, compared with the coming struggle over taxes. For Gramm-Rudman does not command specific budget cuts; it only commands that the Government stop spending money it doesn't have. So why can't taxes be raised? Mainly because Ronald Reagan is passionately opposed to raising them, and because House Democrats, whom Reagan likes to blame for past increases, will not cooperate unless Reagan asks them to do so. Reagan will have to "take the hard knocks," as Speaker Tip O'Neill put it. Or as one Senate G.O.P. strategist suggested, "We all have to join hands and jump off the cliff together."
Washington optimists--and there still are a few--like to view Gramm-Rudman as nothing more than a device for applying pressure. As they see it, when the pressure gets high enough a few months from now--meaning when enough special- interest groups rise in rebellion against the threatened cuts--there will occur, as if by magic, what former Budget Director David Stockman used to call "the big fix." This comes when everybody reluctantly agrees to both some budget cuts and some tax increases. One formula being mentioned is known as 20-20-20, meaning $20 billion in new taxes and $20 billion less for both military and nonmilitary spending.
No way, says the President, and although he is famous for last-minute concessions to sweet reason, he is also famous for last-minute obstinacy. And in addition to budget cutting, he sees all kinds of possibilities in "privatization," the selling off of Government assets (like grazing lands) and reducing of Government functions (like mortgage insurance). "The crystal ball is cloudy, but the political elements for the big fix are probably not now present," reports TIME National Political Correspondent Laurence I. Barrett. "In Congress, there is too much dissension within each House and within each party. In the White House, there is serious question whether Reagan fully understands what is involved. There is also a dearth of both acumen and independent thinking around him. If this analysis is correct, there is good reason to believe that Gramm-Rudman will turn out to be either a means of ravaging many Government functions, including quite legitimate ones, or a malign illusion that merely defers the real day of judgment on the deficit."