New Balanced-Budget Law Is Challenged : Special Federal Panel Hears Arguments on Its Constitutionality

WASHINGTON —  In a compelling three-hour legal confrontation Friday, challengers of a new balanced-budget law told a special federal panel the law should be declared unconstitutional because Congress has no right to “abdicate the hard choices” necessary to slash the deficit.

Under the month-old law, the Gramm-Rudman act, Congress has given unbridled powers to unelected officials in hopes “they will do the job that (lawmakers) have not been willing to do,” they asserted.

But defenders of the law, which would trigger automatic spending cuts in most programs if the government does not approve budgets that meet a series of annually declining deficit ceilings, vigorously argued that the measure should be preserved intact. Congress, they contended, has retained the “ultimate accountability” to exercise its “inherent power” of the purse.

Far-Reaching Consequences

The three-judge U.S. District Court panel that is hearing the case is not expected to reach a decision until late next week at the earliest. Whatever the outcome, the court’s ruling is certain to be appealed directly to the Supreme Court, which will be forced to confront an issue that could have the most far-reaching consequences since the Watergate era for the separation of powers between the legislative and executive branches.

In an unusual twist, the Administration--despite the fact that President Reagan signed the bill into law--refused to defend in court the key provision of the act imposing automatic spending reductions.

Attorney Alan Morrison, representing 12 members of Congress led by Rep. Mike Synar (D-Okla.), argued that Congress cannot give up the power to make “essential decisions” about the budget by allowing the non-elected heads of three agencies--the Congressional Budget Office, the Office of Management and Budget and the General Accounting Office--to prescribe across-the-board spending cuts in all federal programs not specifically protected.

A Headless Monster

“Certain functions are so legislative in nature that they may not be delegated,” Morrison said. “This is one of the things the revolution was fought over.”

Also attacking the law as unconstitutional was the National Treasury Employees Union, whose lawyer, Lois Williams, argued that the act creates a headless monster in which “the President is (not) making a judgment. No one is making” a decision about the best way to slash the federal deficit.

But U.S. District Judge Antonin Scalia pointedly questioned the assertion that Congress had improperly delegated its own budget authority. Suggesting that lawmakers had passed the Gramm-Rudman law because “above all, (they) wanted to balance the budget,” the judge hinted that he might be unwilling to overturn the act simply because other officials were charged with implementing the spending cuts.

First Round of Cuts

Planning for the first round of automatic cuts, amounting to $11.7 billion this year, has already begun. Unless Congress and Reagan can agree by Oct. 1 on a budget that would reduce the deficit to $144 billion next year, the law would require an estimated $50-billion cut for fiscal 1987.

With the Justice Department also challenging the constitutionality of the measure, defense of the Gramm-Rudman act was left to lawyers for Congress and the GAO’s comptroller general.

Attorney Michael Davidson, representing Senate leaders, argued that the automatic spending cuts were nothing more than a “standby mechanism” designed to prod Congress into enacting its own budget. He also insisted that the bill should not be challenged on constitutional grounds unless the budget process fails and the President refuses to carry out the automatic cuts.

Under the law, across-the-board cuts would have to be ordered by the President if the GAO determined that Congress had failed to meet deficit targets that are scheduled to fall by $36 billion a year until the budget is balanced in 1991.

President’s ‘Unique Status’

But the Justice Department argued that the provision imposing automatic cutbacks should be thrown out, requiring Congress to vote on the spending reductions before they could go into effect.

Allowing the GAO to tell the White House how to carry out the spending cuts, Assistant Atty. Gen. Richard Willard said, means that “the unique status of the President in our constitutional scheme has been transgressed. . . . He cannot be made subservient to any other officer in carrying out his executive duties.”

However, attorney Lloyd Cutler defended Comptroller General Charles A. Bowsher by arguing that the GAO is a uniquely independent agency charged with making a narrow, impartial decision on budget cuts.