A budget deal for next year is reportedly in sight, but it would achieve the bare minimum, with hope for a grand bargain to control the nation’s out-of-control spending and debt nowhere in sight.
The deal negotiated by lawmakers sets basic spending levels to avoid a partial government shutdown in the future, and reforms small aspects of the sequester that benefit Democrats who want more government spending.
Congressional sources say House and Senate negotiators are close to reaching an agreement and lawmakers have until Friday to finish off their work for the year.
“‘Close’ is a staff term,” one senior lawmaker cautioned Fox News, suggesting it’s unclear whether those drafting the bill even yet have the votes accumulated.
However, the framework reportedly agreed upon doesn’t remotely resemble the kind of “grand bargain” congressional leaders, particularly House Budget Committee Chairman Paul Ryan, persistently argued was so vital to the future of American solvency.
The Washington Post reported that it would not include any significant tax or entitlement reforms, significantly reform the sequester cuts, and the national debt would continue to rapidly increase for the foreseeable future.
Congressional aides told the Post that the emerging plan would raise agency spending to just over $1 trillion for the next two fiscal years, while making minor attempts to offset some of that spending by cutting federal worker pensions and making other modest changes.
The deal is inadequate, to say the least, for any responsible Republican lawmaker who knows budget reform must be a top priority.
In fact, Chairman Ryan proposed federal workers pay an additional 5.5 percent toward their own retirement, saving taxpayers $130 billion over 10 years. And even big spending President Obama proposed a 1.2 percent increase in hopes of saving $20 billion over the same period.
However, according to aides, Paul Ryan and Patty Murray were talking about a far smaller number — less than $17 billion. In order to ensure the budget deal passes, House Republicans will need a large number of Democrats in the Republican-controlled House. House Minority Whip Steny H. Hoyer, House budget negotiator Chris Van Hollen and Senate Appropriations Committee Chairman Barbara A. Mikulski, all Maryland Democrats with large constituencies of federal workers — are having what the Post referred to as “an outsize influence.”
“I saw those earlier episodes, these grand-bargain pursuits, as ultimately destined for failure because it required one of the parties in power to compromise core principles, and I just didn’t see that happening,” Ryan said in October. “That’s why it’s more appropriate to the moment we have to focus on common ground . . . to get some minimal accomplishments.”
But fellow-Republicans are sure to see this as a complete capitulation by the former Vice Presidential candidate, who championed budget deal arguments sounding more like a grand bargain than this fizzle.
The Post reported that congressional negotiators are hoping to finish off the bill in a matter of days and will take it straight to the floors of the House and Senate, bypassing their respective committees. Lawmakers have until January 15 to pass a budget deal or else risk another partial government shutdown.
The budget deal, however, is but one of the problems Congress will have to face in the weeks to come. While the current budget bill expires in mid-January, lawmakers have until only the end of the year to deal with several other items, including payments to doctors and long-term jobless benefits.
President Obama, as usual, didn’t make matters any easier, because he rearranged their schedules to attend memorial services this week for the late South African leader Nelson Mandela.
Ryan and Murray are also banking on the ability to squeeze billions of dollars out of the sale of broadcast spectrum. Revenue from spectrum sales may be “an easy thing to throw into a budget negotiation,” said Urban Institute budget expert Gene Steuerle. “But it seems like a gimmick.”
Long-term unemployment benefits are also expected to expire on December 28 for 1.3 million workers who’ve been without a job for longer than six months, which Democrats have already begun to press for to the tune of $25 billion.
President Obama used his weekly radio address on Saturday to appeal to Congress to extend it. “Extending unemployment insurance isn’t just the right thing to do for our families — it’s the smart thing to do for our economy,” he said.
Some Democrats threatened to hold up the budget deal unless the GOP agrees to extend jobless benefits, but some influential Democrats don’t seem inclined to do so.
“I don’t think we’ve reached that point where we’ve said this is it, take it or leave it,” Illinois Sen. Dick Durbin, the No. 2 Democrat in the Senate, said on ABC’s “This Week.”
Speaking on “Fox News Sunday,” Sen. Rand Paul, R-KY, said the long-term benefits — which incredibly cover benefits after 26 weeks — are actually doing a “disservice to these workers” by making them less marketable to would-be employers, who are looking for workers who haven’t been absent from the workforce for as long as those benefits encourage people to stay unemployed.
Most economic data shows the longer the government offers unemployment insurance, the longer people will stay unemployed.
Lawmakers are also gearing up to agree on a plan to spend $8 billion on a temporary 3-month measure, merely delaying the inevitable for a ton of money, in order to prevent a 24 percent drop in Medicare payments to doctors. That cut is imposed upon by the president’s health care law, which is set to increase total federal health expenditures to $5 trillion by the year 2022.
Though recent Congressional Budget Office projections deficit slowdowns over the next two years, annual deficits will be exploding again in 2016 as the baby-boom generation enters retirement, setting the debt on a potentially uncorrectable trajectory.
“With this little package, we’re not going to climb out of the hole we’ve dug,” said the Urban Institute’s Steuerle. “All we’re doing is agreeing to stop throwing shovels at each other.”
