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NJ Daily

Everyone Hates the Emerging Budget Deal

House Minority Leader Nancy Pelosi and Rep. Chris Van Hollen fear that Democratic priorities are being ignored in budget talks.(Richard A. Bloom)

December 5, 2013

The details of a potential budget deal are trickling out, and nobody seems thrilled with what they're hearing.

Rep. Paul Ryan and Sen. Patty Murray, cochairs of the budget conference committee, are close to striking a deal that would set spending levels and soften sequester cuts. But lawmakers on both sides of the aisle—including some who serve on the committee—are unsatisfied with what they've learned of the emerging agreement.

"These budget conference negotiations have dragged on for too long and left important priorities at risk," Rep. Chris Van Hollen, D-Md., a member of the budget conference, said Thursday.

 

Van Hollen and House Democratic leaders went on to highlight priorities, including funding for early childhood education and closure of certain tax loopholes for the wealthy and special interests—items Ryan took off the table long ago.

At the same time, Ryan's conference is growing restless in the absence of a budget agreement. Some GOP lawmakers don't like what they're hearing, and others are tired of inaction.

Rep. Mick Mulvaney, R-S.C., is circulating a letter to leadership asking House Speaker John Boehner to pass a continuing resolution "as soon as practicable" to fund government at sequester levels. This idea has strong support among House Republicans, who are reluctant to leave town for the holiday recess next Friday without first taking preemptive action to avoid another government shutdown in January.

The speaker has pledged to pass a CR if budget negotiators fail to reach an agreement. But Boehner, wanting to give Ryan as much negotiating flexibility as possible, did not specify whether that short-term measure would be taken up before the holiday break or after.

Ryan, it seems, is aware of his colleagues' concerns. In a meeting with conservative lawmakers on Thursday morning, Ryan told them to expect the framework of a budget agreement to be announced on Tuesday, giving both parties time to study its components.

"If we don't have a deal by Tuesday, we probably won't have a deal at all," Ryan said, according to people in the room.

While all sides insisted that no agreement has been reached, some top House Democratic staffers on Thursday were provided elements of a budget framework that would keep government open and ease sequestration without raising taxes.

Reaction was immediately cool, with one senior aide describing the details thusly: "House Dems got screwed."

The framework being circulated reflected a two-year deal. It would keep government open beyond the Jan. 15 expiration of federal spending authority under a current stopgap bill through the end of fiscal year 2014 on Oct. 1—and then also through the entire next fiscal year.

This deal would add $40 billion to the annualized top-line budget number for FY14, raising it to about $1.07 trillion from what would be $967 billion under current law. The added money would be split between military and domestic spending. Another $25 billion would be added in FY15, and similarly split, with another $20 billion provided for deficit reduction.

Ryan would not share specifics with his fellow House Republicans on Thursday. Rather, he sought to reassure them that any agreement he brokers will be a "net gain" for conservatives. But not everyone was buying it.

"They want to spend more today with promises of spending less tomorrow," said one leading House conservative, who spoke on condition of anonymity to avoid upsetting colleagues serving on the committee.

Simply put, some conservatives don't support swapping out automatic spending cuts at all, much less in exchange for "user fees" they claim are tax hikes by another name.

The lawmaker, a friend of Ryan's, said increasing user fees "will only punish American families."

Another Ryan ally confirmed that "many of us are concerned" about higher spending levels that would be secured in a budget agreement, and said conservatives are increasingly convinced that their safest play is to pass a clean CR that locks in spending cuts and avoids user fees.

At the same time, those revenue sources being considered to offset the automatic spending cuts provoked instant backlash from some Democrats.

They include raising the security fees on airline tickets, changes to federal retirement programs that would increase worker contributions, and a plan to increase premiums for pension plans backed by the Pension Benefit Guaranty Corp.

The biggest priorities for Democrats at this point are a sequester-replacement package that would evenly split $70 billion between defense and nondefense programs through FY15, and an extension of the unemployment insurance program, which is set to expire on Dec. 28.

Democrats worry that while Murray has continued to push the unemployment insurance extension in her talks with Ryan, House Republicans will not support it, potentially leaving 1.3 million without benefits at the end of this year. But House Democrats did say Thursday that it would not make or break a final budget deal. "I'd like it in the budget; it's part of our budget proposal … or some sidebar initiative that would go along, timing-wise with it," House Minority Leader Nancy Pelosi said Thursday.

One major sticking point for Democrats in a final deal is a proposed increase in the amount of money that civilian federal employees must contribute to their pensions, an idea pulled from both President Obama's and the House Republican 2014 budget proposals. The 1.2 percent increase for federal workers hired before 2013, according to the Congressional Budget Office, would bring in an additional $19.3 billion by 2023.

Federal employee unions are ratcheting up pressure on Democrats to oppose the measure, arguing that federal workers have been repeatedly singled out for deficit reduction. Last year, Congress increased the pension pay-in for employees hired in 2013 and later by 2.3 percent.

"The only working people that have paid a price so far in trying to bring down the deficit have been federal workers.... It is inappropriate to further look to the pockets of federal employees at this point in time," said House Minority Whip Steny Hoyer, whose Maryland district is home to a massive swath of the federal workforce.

Ryan and Murray may be forced to recalibrate their agreement in the face of criticism from both sides. But there isn't much time left to do so. And, as one House Republican framed it, there's a "fragile balance" that could shatter if either Ryan or Murray suddenly moves the goalposts in response to grumbling from their base.

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