One Senator holds key to budget curbs

Last-minute Republican concessions yesterday won the support of two key Democratic Senators for the proposed Constitutional amendment to balance the budget, bringing it within a single vote of the two-thirds Senate majority it needs to clear Congress and go to the states for final ratification.

This possibly decisive twist in a month of political suspense came when Senators Sam Nunn of Georgia and John Breaux of Louisiana dropped their objections after the Senate's Republican leadership agreed to a change in the amendment, barring the courts from intervening in the budget process.

Their switch increased support for the measure to 66 votes, leaving its fate in the hands of three undecided Democrats, the backing of just one would be enough. Simultaneously, Senator Mark Hatfield of Oregon, the lone Republican Senator against the measure, was under intense pressure from colleagues to fall into line.

The roll call vote was the most important so far in the new Congress. Even though it must now be endorsed by 38 of the 50 states - it could take years - a constitutional requirement to balance the budget will give a huge symbolic boost to the entire Republican cause of less spending and smaller government. And if its critics are correct, it may also bring about an unintended shift in the working of the Constitution itself.

To an extent, those fears will have been stilled by yesterday's addition of an extra clause to the amendment's text, stipulating that "any case or controversy arising from it" could not be brought before the courts. Without this proviso, the budget might have been contested in federal court, raising the prospect of unelected judges imposing new taxes.

Unanswered is the main objection of economists to the proposal, that it would reduce the government's ability to use deficit spending as a tool to fight recession, opening the way to a repeat of the Thirties. As Senator Daniel Patrick Moynihan, an unbending foe of the amendment, put it: "We run the risk of forgetting everything we have learnt about managing the economy since the Great Depression." By passing the amendment, he argues, Congress would forfeit its most important prerogative, of controlling taxes and expenditure.

But the voice of public opinion - overwhelmingly in favour of the amendment, if not of $1,200bn of cuts needed if the 2002 target date is to be met - has weighed louder with most of his colleagues. The latest CBS News- New York Times poll yesterday found a 79 per cent majority supported it although that figure drops to 32 per cent if the price of a balanced budget is cuts in social security.

From President Bill Clinton downward, critics of the amendment have challenged proponents to spell out the cuts that will be necessary to meet the 2002 target, but to no avail. The Republicans merely promise that it can be done without touching social security, and Medicare, the health care programme for the elderly.

The amendment does not make a balanced budget automatic. It can be waived by a three-fifths majority in House and Senate, and will not apply during a war or if war is imminent. Most economists insist these provisos are not flexible enough, and that the amendment would only make future recessions far more severe than they would otherwise be.