How the Budget Deal Will Die

As the conference holds its second meeting, Republicans and Democrats are already drawing lines.

WASHINGTON, DC - OCTOBER 29: House Budget Committee Chairman Paul Ryan (R-WI) listens to testimony from Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner during a hearing of the House Ways and Means Committee in the Longworth House Office Building October 29, 2013 in Washington, DC. In the wake of the troubled launch of the website, Tavenner testified about the implementation of the Affordable Care Act, also known as Obamacare.
National Journal
Tim Alberta Sarah Mimms
Nov. 12, 2013, 3:17 p.m.

Rep. Paul Ry­an began the budget con­fer­ence com­mit­tee last month by warn­ing Demo­crats that they would sab­ot­age the ne­go­ti­ations by in­sist­ing on a de­bate over more rev­en­ue.

“If this con­fer­ence be­comes an ar­gu­ment about taxes, we’re not go­ing to get any­where,” Ry­an told the group on Oct. 30. It took Demo­crats all of one week to dis­miss his ad­vice.

Demo­crats on the com­mit­tee draf­ted a memo last week de­tail­ing “egre­gious tax loop­holes” that could be closed to raise rev­en­ue and help soften se­quester cuts — a non­starter for Ry­an and the House Re­pub­lic­an Con­fer­ence.

Mean­while, Sen­ate Budget Com­mit­tee Chair­wo­man Patty Mur­ray, D-Wash., raised Re­pub­lic­an eye­brows over the week­end with a Wash­ing­ton Post op-ed ar­guing that it would be “un­ac­cept­able” to craft a budget deal that doesn’t in­clude clos­ing cer­tain tax loop­holes.

“All we’re say­ing is that, look, here are a menu of op­tions, a menu of loop­holes. It can’t pos­sibly be that you’re pro­tect­ing all of these,” a seni­or Demo­crat­ic aide said Tues­day.

Against this back­drop, Ry­an and Mur­ray are poised to con­vene Wed­nes­day’s meet­ing amid the type of par­tis­an bick­er­ing both chair­men had hoped to avoid.

“Un­help­ful,” said one seni­or Re­pub­lic­an aide, in re­sponse to Mur­ray’s op-ed. Ad­di­tion­ally, the aide said, Mur­ray’s re­cent pro­file in The Huff­ing­ton Post, in which she seemed to com­pare Re­pub­lic­ans to preschool­ers, was “sur­pris­ing” after the col­legi­al tone ini­tially taken by her and Ry­an.

While dis­cus­sions con­tin­ue between Mur­ray and Ry­an, neither camp would of­fer any in­dic­a­tion of wheth­er pro­gress is be­ing made.

“I think both mem­bers in their open­ing state­ments [Wed­nes­day] will talk about the fact that ne­go­ti­ations are on­go­ing — and that in it­self is pro­gress, that noth­ing is at a stand­still,” a seni­or Demo­crat­ic aide said Tues­day.

Ry­an has en­dorsed the concept of hik­ing vari­ous “user fees” to help craft a budget agree­ment. But he re­fuses to con­sider clos­ing tax loop­holes for the pur­pose of rais­ing rev­en­ue. This may in part be be­cause his friend, House Ways and Means Com­mit­tee Chair­man Dave Camp, R-Mich., could tar­get those same loop­holes in a bi­par­tis­an tax-re­form blue­print.

In that light, Ry­an’s small-ball ap­proach to the budget ne­go­ti­ations made sense. His bi­par­tis­an budget con­fer­ence should be about cut­ting spend­ing, Ry­an con­cluded, while Camp’s bi­par­tis­an tax-re­form talks should be about clos­ing loop­holes and craft­ing an over­haul of the na­tion’s tax laws.

“Today, our tax code is full of carve-outs and kick­backs. We need to get rid of them — and those bi­par­tis­an [tax-re­form] talks are just the way to do it,” Ry­an said Oct. 30. “So let’s do all we can to en­cour­age that ef­fort. And let’s fo­cus our en­ergy on the task at hand: a budget that cuts spend­ing in a smarter way.”

But Demo­crats, long in­sist­ent that any budget agree­ment cut­ting spend­ing must also in­clude rev­en­ue hikes, don’t share Ry­an’s ap­proach. Mur­ray, for her part, agreed with Ry­an about their com­mit­tee’s scope, but said a few tar­geted fixes won’t en­danger the work be­ing done by Camp and Sen­ate Fin­ance Com­mit­tee Chair­man Max Baucus, D-Mont.

“A budget con­fer­ence is not the place to de­bate com­pre­hens­ive tax re­form,” Mur­ray wrote in her Post op-ed, and later ad­ded, “But clos­ing a few waste­ful loop­holes now would not threaten the much lar­ger de­bate over sim­pli­fy­ing the 75,000-page tax code.”

While stak­ing out their re­spect­ive po­s­i­tions, there has been an ex­pect­a­tion that Ry­an and Mur­ray would ul­ti­mately come to­geth­er as a “com­mit­tee of two” and at­tempt to re­con­cile their dif­fer­ences with a scaled-down deal that would be pal­at­able to both parties.

That ef­fort, however, could be com­plic­ated now that Mur­ray and her fel­low Demo­crats on the com­mit­tee have made known their de­term­in­a­tion to close tax loop­holes, which some Re­pub­lic­ans say is a re­jec­tion of Ry­an’s ap­proach.

Mean­while, both parties con­tin­ued to ratchet down ex­pect­a­tions head­ing in­to Wed­nes­day, ar­guing that the pub­lic meet­ing will be an­oth­er op­por­tun­ity for con­fer­ence mem­bers to dis­cuss the is­sues, not to out­line any spe­cif­ics on a work­able plan.

Demo­crats hope the fisc­al crises that led to the gov­ern­ment shut­down earli­er this year will push Re­pub­lic­ans to ne­go­ti­ate. Yet Ry­an and his team, while hope­ful for a deal, aren’t feel­ing pres­sured by the Dec. 13 dead­line to re­port the com­mit­tee’s re­com­mend­a­tions.

“It’s a dead­line without any con­sequences, ob­vi­ously,” Ry­an spokes­man Wil­li­am Al­lis­on said. “If we don’t do any­thing, the gov­ern­ment doesn’t shut down, there’s not a second se­quester that hits, there’s not a debt lim­it, so if we fail to reach an agree­ment by Decem­ber 13, the world keeps spin­ning and everything’s fine.”

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