Automatic Spending Cuts Deleted : Congress OKs $32-Billion Increase in National Debt

WASHINGTON —  Congress adjourned early Saturday after giving final approval to a $32-billion emergency credit increase for the Treasury--the last legislation needed before lawmakers could leave for a three-week Labor Day recess.

But supporters of the Gramm-Rudman law failed in their attempt to use that measure to gain passage of a controversial plan to put automatic spending cuts back into the law.

Senate supporters of the budget-balancing law succeeded in the Senate in attaching their amendment to the debt bill. The Supreme Court last month voided the automatic-cut provision but left the targets in place, allowing Congress to vote on whether to impose the reductions.

The amendment survived an attempt by opponents to kill it, but then it took two attempts before the Senate narrowly managed to pass the debt package, 36 to 35, and send it to the House.

Language Stripped Out

The House, however, stripped out the Gramm-Rudman language, sent it back to the Senate by a vote of 175 to 133 and adjourned. The Senate had little choice but to accept the bill, and shortly after 4 a.m., it adjourned until Sept. 8.

The votes leave in place a fallback procedure of the Gramm-Rudman bill under which Congress must pass a resolution to require the across-the-board cuts. They would take effect if Congress failed to bring the fiscal 1987 deficit down to within $10 billion of the Gramm-Rudman target of $144 billion, based on estimates scheduled for release this week by the Congressional Budget Office and the Office of Management and Budget.

Recent estimates put Congress’ current spending gap at about $21 billion above the nominal fiscal 1987 target of $144 billion, so lawmakers would have to find about $11 billion in savings to avoid the cuts.

The automatic cuts would be the same but without requiring Congress to vote. That issue will return, because the Senate in July attached the Gramm-Rudman amendment to a pending long-term debt bill needed by late September or early October.

Passed by One Vote

Senate opponents Friday night tried to table, or kill, the Gramm-Rudman measure, but it survived on a 62-29 vote, thus remaining tied to the debt bill. The debt bill at first lost 47 to 32, but then passed by one vote after it became clear the recess would be further delayed if it was not approved.

The debt bill, which the Senate reduced from the House-passed level of $73 billion, was needed because record annual deficits have exhausted the Treasury’s credit limit of $2.079 trillion. Without a boost, the Treasury said it would default during the congressional recess.

The plan reviving the automatic cuts, first endorsed by the Senate two weeks ago on a long-term debt bill, was opposed by House Democrats in part because it would give more power to President Reagan’s budget director. The long-term bill stalled, creating the need for the stopgap measure, which is designed to finance the government until Sept. 30.