US budgets in the '80s: a rein on social ventures
The Carter administration and Congress are facing what promises to be perhaps the major federal budgetary problem of the 1980s: Barring massive -- and unpopular -- new federal tax measures, there is increasingly little room in the budget for putting through large-scale domestic social projects.
The reason is that the bulk of the budget -- currently 76 percent of all federal outlays -- is in spending commitments that are "locked into place" by prior Congresses and virtually beyond the reach of either the administration or lawmakers.
For the Carter administration, which is expected to unveil a fiscal year 1981 budget next week of around $616 billion, the overwhelming percentage of the budget represented by fixed "entitlement" or "guaranteed" federal programs -- such as social security and federal pension payments -- has meant the necessity for relative "austerity" and "tightness."
That poses no immediate threat to the administration, given the current trend toward "conservatism" on the part of the US public.
But looking further into the 1980s, the budgetary difficulty is very real. It means limited latitude for large-scale funding programs, even programs that might be considered absolutely necessary.
For that reason, a number of efforts are under way here to slash the entitlement-contracts portion of the budget:
* A number of lawmakers are calling for the elimination of most entitlement programs outright, or requiring taxpayers to bear annual increases in costs resulting from inflation. That would mean eliminating inflation "indexing" formulas in many of these programs.
* Congress is being urged to refine further its budgetary system. The system has been greatly strengthened during the past several years; changes have included adding various mandatory "time frames" within which committees must act in preparing spending requests. But there is a feeling on the part of many lawmakers that Congress must move toward "multiyear" budgeting. Such budgeting, however, would have some obvious similarities to the "five-year plans" of many East bloc nations, a concern of more cautious legislators.
* Ironically, the continuing budget dominance of entitlement-contract programs could even work in favor of proposals for a federal ceiling gap on expenditures. The reason is that the only real way to start up expensive new programs would be to increase the budget sharply -- a position anathema to fiscal conservatives.
In fiscal year 1967 entitlements alone made up 36.1 percent of the federal budget. By the current 1980 budget they had shot up to 59.5 percent.
Included are such hefty transfer programs as social security, veterans benefits, revenue sharing, public assistance, and unemployment insurance, plus federal retirement pay.
In addition, a number of additional long-range contract and guaranteed loan programs make up another 16 percent of the budget.
Added to the entitlement programs, that means that, in effect, 76 percent of the budget is beyond the reach of lawmakers. A big chunk of the balance, moreover, goes to the Pentagon and the federal payroll, leaving precious little cash to play with.
Robert N. Giaimo (D) of Connecticut, chairman of the House Budget Committee, sees a need first to cut back on federal loan guarantees and other fixed contracts before directly reforming the entitlement area. Most important, he agrees that Congress must eventually take further action to get "control" over the budget.
Some steps along that line are already under way.
This year, all House Committees dealing with entitlements are required (under the 1980 budget resolution) to determine ways of gaining greater control over entitlement outlays.
Equally important, though, no "comprehensive" congressional review of the entitlement programs has been starte, either by a the various financial committees or by a special as hoc committee.
"Since entitlements are parceled out over the lot," such an overview committee "would be a very unpopular [group] indeed," says one official of the House Budget Committee.
While Mr. Giaimo has cautioned against starting up new entitlement programs without real forethought, Sen. Joseph R. Biden Jr. (D) of Delaware has introduced legislation that would scrap all entitlement programs except for social security and medicare.