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Predictions Differ on Education Impact Of Proposed Balanced-Budget Mandate

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WASHINGTON--As momentum builds in the Congress for passage of a constitutional amendment requiring a balanced budget, observers here offer differing predictions about the effect such an amendment would have on federal education programs.

Senator Paul Simon, the Illinois Democrat who is sponsoring the amendment in the Senate, said in an interview that it would "force us to make rational priorities.''

But critics note that proposals sponsored by Mr. Simon and Representative Charles W. Stenholm, the Texas Democrat who has authored a similar House resolution, require the President to propose a balanced budget and the Congress to enact one, but do not provide a mechanism for achieving--or enforcing--the mandate.

Education programs, observers say, could be caught in a fiscal squeeze if lawmakers target discretionary spending.

"We are concerned because in order to comply with a balanced-budget amendment, we reason that it could have an impact on domestic discretionary spending, which includes our programs,'' said Arnold L. Mitchem, the executive director of the National Council of Educational Opportunity Associations and the current president of the Committee for Education Funding.

Several attempts to pass a balanced-budget amendment failed during the 1980's. In 1982, the Senate approved such a measure with the necessary two-thirds majority, but House proposal fell 46 votes short. The amendment failed by one vote in the House in 1990, and by seven votes in the Senate in 1986.

Gathering Steam

President Bush favors the idea, while most Congressional leaders oppose it.

Over the last several weeks, however, the nation's economic woes,scandal at the House Bank, and the political pressure of an election year have built new momentum on Capitol Hill. In late April, Speaker of the House Thomas S. Foley of Washington, an opponent, predicted that a balanced-budget amendment would pass this year.

The House Budget Committee has held a series of hearings in the past month on the amendment. While the committee's chairman, Leon E. Panetta, opposes the proposal, the California Democrat said he will push for simultaneous House votes on the amendment and an enforcement mechanism that would be used if the President and the Congress failed to pass a balanced budget.

Mr. Simon has secured a promise from Senator George J. Mitchell of Maine, the Senate majority leader, for a vote on his resolution in early June.

If approved by the Congress, the resolution would still have to be ratified by three-fourths of the states. Both proposals would delay implementation at least two years after ratification.

But Mr. Panetta said such an amendment would likely trigger immediate cuts in entitlement and discretionary spending, as well as increased taxes.

"If you're going to do balanced-budget amendments for 1997 ... you're talking about $40 billion or $50 billion in additional savings that would have to be done in 1993 for that to happen,'' Mr. Panetta said at a recent budget meeting.

The chairman is preparing a list of potential cuts for fiscal 1993 that he will present when Mr. Stenholm's resolution reaches the House floor.

Choices and Sacrifices

Robert D. Reischauer, the director of the Congressional Budget Office, told the House Budget Committee at a recent hearing that such an amendment "requires sacrificing other desirable objectives--namely, keeping taxes low and maintaining government services.''

The fiscal 1992 deficit is estimated at $400 billion; the entire federal budget totals about $1.5 trillion.

According to the C.B.O., nearly half the budget goes toward such mandatory benefit programs as Social Security, Medicare, and the primary welfare program. Spending on those programs can be curbed only with changes in laws setting eligibility standards or benefit levels, something that is politically difficult to do.

Interest on the federal debt consumes 14 percent of the budget.

That leaves defense programs, which make up 19 percent of the budget, and domestic discretionary programs, which make up another 14 percent, as the likely targets for cuts.

Mr. Mitchem said this could doom education programs. In addition to losing federal funds, he said, schools could find themselves with fewer state dollars, as well.

A tighter federal budget could result in reduced payments to states for such programs as Medicaid, Mr. Mitchem said, making state budgets the primary source for those programs and squeezing dollars for education and other social programs.

"It's a hornet's nest,'' he said.

But some proponents, such as Mr. Simon, say mandating a balanced budget will force the President and the Congress to confront the real sources of the deficit, possibly freeing more funds for discretionary programs in the long run.

"The only way we're going to get money for education, as well as health care and other programs I care about ... is to cap the interest figure and, I think, [create] some cutbacks in spending, mainly defense, and some growth in revenue,'' Senator Simon said.

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