The Supreme Court yesterday declared unconstitutional the controversial Gramm-Rudman deficit-reduction act requiring a balanced budget by 1991.

Experts said the elimination of Gramm-Rudman's automatic budget cuts will complicate and extend Congressional debate over the budget this year by forcing Congress to make political decisions about their spending priorities. Harvard officials, who lobbied against Gramm-Rudman since a bill was introduced in Congress this fall, celebrated the ruling as beneficial for higher education.

The justices, by a 7-2 vote, said the automatic deficit reductions violated separation of powers between the executive and legislative branches of government, affirming the decision made early last February by a special three-judge court.

The law, according to the court's decision, wrongly empowers a congressional official, the comptroller general, to perform an executive function. The comptroller general, appointed by the president, heads Congress' General Accounting Office, a watchdog agency that audits federal programs.

Some experts said that the absence of the Gramm-Rudman act will improve the quality of Congress' budget-making process. Without the protection of Gramm-Rudman's automatic provision, "there's no place to hide from hard budget decisions," said John Shattuck, Harvard vice president for government and community affairs.

"It will be a more rational and more political process," said Shattuck. "They will have to look at different budget items and decide their most important priorities," he said.

Harvard had argued that cuts to meet Gramm-Rudman goals would disproportionately target federal funding for university research and student financial aid. Funding for higher education, unlike some other domestic spending, is not specifically protected against sharp cuts under Gramm-Rudman, and experts argued that such funds do not carry the political clout to be spared of the congressional axe.

Stalemate

But one economist said the court's removal of Gramm-Rudman's mandates will not improve the process of agreeing on a budget. Congress and the Administration will probably return to a stalemate about where and how to reduce the deficit, said Benjamin M. Friedman, Harvard professor of economics.

"There's no question that Congress would liketo lower the deficit, but their methods of gettingthere--decreasing military spending and taxincreases--are not acceptable to theadministration," said Friedman.

"The advantage of Gramm-Rudman is that it madeclear what would happen if the administrationfailed to go along with Congress. Theformula-based cuts that would take over were notnecessarily favorable to the administration," hesaid.

The elimination of the automatic cuts will"increase the chance that the administration willhang tough and not go along with Congress'suggestions," Friedman said.

The bill contains a fallback provision thatallows Congress to vote on a deficit-reductionpackage if the automatic feature was invalidated,and there is some speculation that Congress maycontinue to use Gramm-Rudman as an unofficialbudget guideline, experts said.

Congress approved a budget of nearly $1trillion on June 27, projecting a deficit of$142.6 billion, which is within the range requiredby Gramm-Rudman. The economic problems will notappear in the 1987 budget, but the "real crunchwill come in a few years," Friedman said.

Back to 1787

Legal experts were disappointed, but notsurprised with the court's decision, because itcontinues a pattern of rigidity in the SupremeCourt on issues of separation of powers.

"The Supreme Court has recently been willing toact as if nothing has changed since 1787 whendealing with separation of powers issues," saidRichard H. Fallon, assistant professor of law."They insist on tracing back to the intent of theConstitution's writers," he said