Can Paul Ryan Put Down a Revolt From the Right?

National Journal
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Sarah Mimms, Tim Alberta and Billy House
Dec. 10, 2013, 5:15 p.m.

After weeks of closed-door talks, House and Sen­ate ne­go­ti­at­ors fi­nally un­veiled a two-year budget deal Tues­day that at­tempts to calm the long-fought feud over spend­ing on Cap­it­ol Hill. But the ques­tion re­mains wheth­er they can sell it to rank-and-file law­makers.

The deal is far from a grand bar­gain. But if ap­proved by the House and Sen­ate, the com­prom­ise would not only keep gov­ern­ment fun­ded and open bey­ond Jan. 15, but also would provide $63 bil­lion in se­quester re­lief over two years — all without new tax rev­en­ue.

“This is the first di­vided-gov­ern­ment budget agree­ment since 1986,” said House Budget Chair­man Paul Ry­an, the chief Re­pub­lic­an ne­go­ti­at­or.

Wheth­er the deal holds up could play out quickly. The House is ex­pec­ted to ad­journ for the year on Fri­day, and lead­ers there are mov­ing for floor ac­tion on the meas­ure as early as Thursday. Ry­an may face the most im­me­di­ate chal­lenge, meet­ing be­hind closed doors Wed­nes­day morn­ing to ex­plain the agree­ment to skep­tic­al House con­ser­vat­ives, many of whom have voiced op­pos­i­tion to any deal that raises spend­ing levels.

Some Sen­ate Re­pub­lic­ans were also balk­ing at the agree­ment Tues­day night.

“I’m con­cerned about it,” said Minor­ity Whip John Cornyn of Texas, be­fore the deal was even an­nounced. “What I’ve heard is that it ba­sic­ally raises rev­en­ue through fee in­creases — doesn’t do any­thing to deal with the un­sus­tain­able en­ti­tle­ment is­sues and bust the budget caps.”

After the plan was re­leased, Cornyn, who faces reelec­tion in 2014, called it “con­cern­ing” and char­ac­ter­ized it as “a more-spend­ing plan.”

The deal sets top-line spend­ing at $1.012 tril­lion for fisc­al 2014, which ex­actly splits the num­bers in the House and Sen­ate budget pro­pos­als passed earli­er this year. In fisc­al 2015, the over­all spend­ing level would rise to $1.014 tril­lion.

The $63 bil­lion in se­quester re­lief is split evenly between de­fense and nondefense pro­grams. In fisc­al 2014, de­fense dis­cre­tion­ary spend­ing would be set at $520.5 bil­lion, and nondefense dis­cre­tion­ary spend­ing would be set at $491.8 bil­lion.

The se­quester re­lief is de­scribed as be­ing fully off­set by sav­ings else­where in the budget. In fact, the agree­ment in­cludes dozens of spe­cif­ic de­fi­cit-re­duc­tion pro­vi­sions, with man­dat­ory sav­ings and nontax rev­en­ue total­ing roughly $85 bil­lion. In all, the pro­pos­al would save $28 bil­lion over 10 years by re­quir­ing the pres­id­ent to se­quester the same per­cent­age of man­dat­ory budget­ary re­sources in 2022 and 2023 as will be se­questered in 2021 un­der cur­rent law.

The plan does not deal with the debt ceil­ing, which is an­ti­cip­ated to be reached some­time after Feb. 7.

“This doesn’t solve all of our prob­lems,” said Sen­ate Budget Chair­wo­man Patty Mur­ray, the prin­cip­al Demo­crat­ic ne­go­ti­at­or. “But I think it’s an im­port­ant step in help­ing to heal some of the wounds here in Con­gress, to re­build some trust and show that we can do something without a crisis right around the corner.”

She ac­know­ledged dis­ap­point­ment “that we wer­en’t even able to close a single cor­por­ate tax loop­hole as part of the plan.”

Ry­an, whom con­ser­vat­ives de­scribe as the most highly re­spec­ted mem­ber of the House GOP when it comes to fisc­al mat­ters, seems up to the task of selling the deal. He re­peatedly framed the agree­ment as “con­ser­vat­ive” on Tues­day, em­phas­iz­ing at the out­set: “It re­duces the de­fi­cit without rais­ing taxes.”

However, some con­ser­vat­ive law­makers have been openly agit­at­ing for GOP lead­er­ship to pass a “clean” con­tinu­ing res­ol­u­tion at se­quester levels. That ef­fort re­ceived sig­ni­fic­ant out­side sup­port on Tues­day when the Con­ser­vat­ive Ac­tion Pro­ject, an um­brella group rep­res­ent­ing a host of in­flu­en­tial right-wing lead­ers, sent a let­ter to con­gres­sion­al Re­pub­lic­an of­fices ur­ging them to em­brace se­quest­ra­tion and op­pose the Ry­an-Mur­ray deal.

“Though con­ser­vat­ives sup­port more spend­ing re­straint, the dis­cre­tion­ary spend­ing lim­its defined in the Budget Con­trol Act rep­res­ent a prom­ise to the Amer­ic­an people to mar­gin­ally slow the growth of gov­ern­ment,” says the let­ter, which is signed by Her­it­age Ac­tion CEO Mi­chael Need­ham, Fam­ily Re­search Coun­cil pres­id­ent Tony Per­kins, and Amer­ic­an Con­ser­vat­ive Uni­on chair­man Al Carde­n­as, among oth­ers.

The let­ter rep­res­ents a sweep­ing re­buke of Ry­an’s pro­pos­al from a broad co­ali­tion of in­flu­en­tial con­ser­vat­ive act­ors. “Le­gis­la­tion that raises fed­er­al rev­en­ue and spend­ing levels is un­ac­cept­able to con­ser­vat­ives and the ma­jor­ity of Amer­ic­ans and should be re­jec­ted by Con­gress,” the let­ter says.

Ry­an seemed to sense the loom­ing chal­lenge on Tues­day, and took care to frame the de­bate on his own terms.

“As a con­ser­vat­ive, I deal with the situ­ation as it ex­ists. I deal with the way things are, not ne­ces­sar­ily the way I want things to be,” Ry­an said. “I have passed three budgets in a row that re­flect my pri­or­it­ies and my prin­ciples and everything I want to ac­com­plish. We’re in di­vided gov­ern­ment. I real­ize I’m not go­ing to get that.”

At one point, Ry­an seemed to speak dir­ectly to his House GOP col­leagues, per­haps pre­view­ing the pitch he’ll make to them at Wed­nes­day morn­ing’s con­fer­ence meet­ing.

“As a con­ser­vat­ive, I think this is a step in the right dir­ec­tion,” Ry­an said. “What am I get­ting out of this? I’m get­ting more de­fi­cit re­duc­tion. The de­fi­cit will go down more by passing this than if we did noth­ing. That’s point No. 1. Point No. 2 is, there are no tax in­creases here. Point No. 3: We’re fi­nally start­ing to deal with auto­pi­lot spend­ing, that man­dat­ory spend­ing that has not been ad­dressed by Con­gress for years.”

Ry­an ac­know­ledged that some con­ser­vat­ives will vote against the pro­pos­al, but pre­dicted, “I think we will pass this through the House.”

There are po­ten­tial stick­ing points for some law­makers in the meas­ures to help pay for the ad­ded spend­ing, in­clud­ing in­creas­ing fed­er­al em­ploy­ee con­tri­bu­tions to re­tire­ment pro­grams by 1.3 per­cent­age points. The pro­pos­al af­fects new em­ploy­ees hired after Dec. 31 of this year with less than five years of ser­vice.

An­oth­er pro­vi­sion would in­crease the premi­ums that private com­pan­ies pay the fed­er­al gov­ern­ment to guar­an­tee their pen­sion be­ne­fits.

Oth­er rev­en­ues would come through a range of meas­ures, from in­creas­ing Trans­port­a­tion Se­cur­ity Ad­min­is­tra­tion fees to re­peal­ing the re­quire­ment that the Mari­time Ad­min­is­tra­tion must re­im­burse oth­er fed­er­al agen­cies for costs as­so­ci­ated with ship­ping food aid on U.S. ships.

Des­pite ef­forts by Demo­crats, an ex­ten­sion of un­em­ploy­ment be­ne­fits was not in­cluded in the deal. Those be­ne­fits for 1.3 mil­lion work­ers un­em­ployed for longer than 26 weeks are set to ex­pire on Dec. 28.

While both sides ex­pect tough days ahead as Ry­an and Mur­ray at­tempt to sell the plan, it got a boost from Pres­id­ent Obama, who re­leased a state­ment sup­port­ing the deal late Tues­day.

“This agree­ment doesn’t in­clude everything I’d like — and I know many Re­pub­lic­ans feel the same way,” he said. “That’s the nature of com­prom­ise. But it’s a good sign that Demo­crats and Re­pub­lic­ans in Con­gress were able to come to­geth­er and break the cycle of short-sighted, crisis-driv­en de­cision-mak­ing to get this done.”

Contributions by Michael Catalini