Everyone Hates the Emerging Budget Deal

Nancy Pelosi meets with Democratic Congressional Campaign Committee Chairman Chris Van Hollen at the DCCC on election night, Tuesday, November 2, 2010.
National Journal
Tim Alberta, Sarah Mimms and Billy House
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Tim Alberta Sarah Mimms Billy House
Dec. 5, 2013, 3:27 p.m.

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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