Balanced Budget Charade

The Carter Administration and Congress last week continued their deadlock over Government spending in 1981, after a White House session attended by the President and congressional leaders failed to resolve disagreements on how to balance next year's budget. But, as the nation slips into recession, the whole balanced budget debate has become an increasingly dangerous and irrelevant political game. The recent developments are of particular concern to Alan Greenspan, who served as chairman of the Council of Economic Advisers under President Ford. Warns Greenspan:

"Once the second-quarter G.N.P. estimates are known in two weeks, there is no way to get a fiscal 1981 balanced budget. The revenues will not be there to equal Government spending. We are going through an extraordinary charade in the budget process, which I'm terribly concerned about. We are eating up very precious political capital on the question of budget balancing. This is surely an exercise in utter futility. As soon as it becomes clearly impossible to balance the budget, that is going to be read as carte blanche to a number of people who want to add new expenditure programs and go full force on spending.

"We are in for a fundamental and jolting shift in policy that will do very considerable political damage to the economic policymaking apparatus. If you go out and promise the American public that there will be a balanced budget in fiscal '81 and it isn't done, where does that put political support the next time it is required, which is 1982 and 1983?

"This hoax should be headed off. However, nobody wants to blow the whistle because that has political consequences to the whistle blower. I'm fearful of the consequences for the political system."

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