Blowing Smoke

WITH AN impressive huff and a puff, House Democrats last week cleared the latest Reagan smokescreen: a proposed Constitutional amendment mandating a balanced budget. Administration foes claimed a victory, but their actions may well prove costly as the final month of election campaigning gets underway.

Undeniably, the Democrats' surprisingly easy defeat of the amendment continued the President's losing streak on Capitol Hill. Congress has recently reasserted its responsibility to evaluate carefully the schemes shuttled over from the White House and resist the temptations of Reagan's previously successful cuff links-and-small talk lobbying efforts.

The amendment itself, endorsed earlier by the Republican controlled Senate, would have straight-jacketed future Congresses by forcing them to ignore national economic problems while scrambling to hack out spending reductions. Last week's vote not only gives power back to future legislators, but also exposes Reagan's willingness to alter the Constitution merely to serve his own hypocritical political ends.

The President has himself done more to mock the idea of fiscal rationality than House Speaker Tip O'Neill and the rest of the Democratic establishment could have even if the worst presidential charges of liberal profligacy were true. Reagan has dissolved national revenues with his misguided tax cuts while increasing military spending to a projected 7 1 percent of the Gross National Product--up from 5.6 percent. He berated his opponents for "stonewalling" and "budget-busting," while his own administration racked up the largest deficit of all time. Simultaneously, Reagan has taken credit for the dip in inflation rates without acknowledging that unemployment has risen by two percentage points as a result. White House-backed tight money policies may slow price increases, but they also create recessions and layoffs. Reagan has apparently decided to ignore the nearly one out of 10 Americans now unable to find work.

The President has not, however, decided to change course after last week's setback. Blustering about his "deep, burning anger," he vowed to use his influence to crush those who opposed his empty amendment. Many Democratic congressional candidates, as well as the 20 Republicans who stood up for reason under intense peer pressure, will have difficulty explaining to impatient constituents why they opposed a measure encouraging a balanced national ledger.

But it is the current administration that should be on the defensive. Its overall supply-side economic policy has proved a colossal failure. Spartan monetary policy has kept interest rates high, while investors have not reacted to the tax-giveaway prod as they were supposed to. Instead, the wealthy are worried about deficits--Reagan deficits. Along with new unemployment statistics expected to show no improvement in the availability of jobs, these realities ought to give Democrats plenty to talk about on the stump this month.