Stumbling to a Showdown

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Ironically, the uncertainty persists even though both Republicans and Democrats on Capitol Hill agree on the general outline of a compromise that would almost surely win broad bipartisan support. It could include a 4% surcharge on taxable incomes of $40,000 or more; a 50-per-gal. increase in the excise tax on gasoline and some kind of energy tax increase, such as a $5-per-bbl. fee on oil imports. The increase in military spending would be cut from Reagan's proposed 11% to 7%. Raises in Social Security benefits now scheduled for next July would be delayed for three months, then pegged at perhaps 3% below the cost of living price index, rather than tied directly to it. The result could be a much needed $80 billion slash in the 1983 budget deficit.

Without some such reduction, the impending deficits are fearful to contemplate. By Administration accounting, Reagan's proposed budget will produce a $101.9 billion imbalance, with deficits of $93.8 billion and $81.8 billion to follow. The Congressional Budget Office, which has no motive to look on the bright side, assumes that Congress will not make further drastic cuts in federal social programs and foresees a 1983 deficit of $180 billion, which could rise to $220 billion and $240 billion in 1985.

Whether those immense deficits, by far the highest in American history, can be avoided depends on personalities as well as politics. With an almost messianic faith in the viability of his economic program, the President finds it hard to change direction and admit that those deficits are glaringly at odds with his campaign promise to balance the budget before the end of his four-year term. Democrats, on the other hand, know that the President and his party have been wounded by the recession; with an eye on this fall's elections, they are not all that eager to rescue Reagan from what they regard as his own economic folly.

Such partisan, self-serving postures make no sense when the stakes for the nation are so high, and when economic collapse would deservedly bring down the wrath of the voters on incumbents of both parties. Clearly, however, the President and the Republican candidates have the most to lose in the November elections, and Reagan remains the key to a solution. If he agrees to a reasonable compromise, it is unlikely that O'Neill, that other stubborn Irishman, would have either the clout or the desire to block it. Despite his bluster, the House Speaker would not want to be blamed for any new stalemate that worsens the economy.

Yet even if all the key actors in the Washington drama reach general agreement on what must be done about the budget, there is still no certainty that Congress would approve it either swiftly or as a coherent whole. Predicts Democratic Congressman Leon Panetta of California, a member of the House Budget Committee: "If anyone thinks that this is going to be a nice, neat package, with everybody jumping up and down and passing it in a few hours, well, that's not going to happen." Why? The very nature of today's Congress works heavily against a rational, orderly resolution of urgent national problems.