Rigging the Numbers

The sequester was dead, but the rest of Gramm-Rudman remained. OMB and CBO submitted their required "snapshots" of the budget situation on August 15. With CBO estimating the 1987 fiscal year deficit at $170.6 billion and OMB at $156.2 billion, the two were averaged, according to the law, to come to a deficit of $163.4 billion. Because the GRH target deficit for FY87 was $144 billion, with the usual $10 billion leeway, Congress and the president would have to make at least a $9.4 billion reduction to cut the deficit below $154 billion.^[29] These estimates were $14 billion below the two organizations' previous baseline forecasts. Since no appropriations had been enacted by mid-August, both CBO and OMB, following the law, projected the deficit by assuming appropriations at the FY86 (1985) levels, after the March GRH cuts. These, of course, were below the inflation-adjusted baseline.^[30] Technically this was not cheating.

By now members had the bright idea of using an extra $11 billion in revenue estimated to come from the first year of tax reform to meet the targets, thereby avoiding such horror stories as reducing the armed forces by 400,000 men and women or crumbling air traffic control towers. Of course, the new revenues, if they materialized at all, would be a one-time thing, so the FY87 problem would be alleviated only by making FY88 much more difficult. "If Congress were covered by the criminal law," Senator Rudman summed up a chorus of objections, "it should be indicted."^[31] Nevertheless, in view of the alternatives, the feeling grew that any short-term fix was better than the dreaded sequester. Representative Tom Loeffler (R-Tex.) wanted to gain $6.5 billion dollars by selling federal assets.^[32] Democrats had their own grab-bag: hiking the cigarette tax, demanding state and local government employees join medicare, raising telephone excise taxes, introducing a gas tax, and the like, presumably adding up to $6.3 billion.^[33]

In mid-September, the budget committees agreed that Congress would have to raise revenue or reduce spending by about $15 billion; $5 billion each would come from sales of assets, from appropriation cuts, and from "user fees" (a euphemism, perhaps, for tax increases). If Congress would not do what Gray and Domenici wanted—namely, find substantial revenue increases and spending cuts for long-term budget balancing—temporary measures would have to do. If they could not fix the deficit, budget leaders at least wanted to establish principles of responsible procedure. Therefore, Bill Gray pressed to prevent spending

increases within the reconciliation package. He also wanted to delay the continuing resolution until after reconciliation (so Congress could not go home without passing reconciliation first).^[34]