Congress and White House Reach Tentative Budget Deal

27 Oct 2015 | Author: | No comments yet »

Congress and White House Reach Tentative Budget Deal.

WASHINGTON — After five years of bitter clashes, Republican congressional leaders and President Obama on Monday night appeared to settle their last budget fight by reaching a tentative deal that would modestly increase spending over the next two years, cut some social programs, and raise the federal borrowing limit. Congressional leaders are throwing their collective weight behind a hard-won, two-year bipartisan budget plan aimed at heading off a looming government debt crisis and forestalling a government shutdown in December. The accord, which must be approved by the House and the Senate, would avert a potentially cataclysmic default on the government’s debt and dispenses with perhaps the most divisive issue in the capital just before Speaker John A.

The two-year pact, which would take those volatile fiscal issues off the table until after the 2016 presidential election, would give both the Pentagon and domestic agencies $80 billion in relief from budget constraints in exchange for cuts elsewhere in the budget. A White House official said on Tuesday the compromise deal would protect Social Security and Medicare beneficiaries from cuts and urged members of Congress from both parties to pass it. “It’s a responsible agreement that is paid for in a balanced way by ensuring that hedge funds and private equity firms pay the taxes they owe and by cutting billions in wasteful spending,” the official said in a statement. Whether the tentative deal reached late Monday succeeds depends in great measure on the reception it gets from Republicans, including conservatives who forced out House Speak John Boehner.

Shortly before midnight, House Republicans posted the text of the 144-page bill, which was labeled a “discussion draft” but appeared to reflect the tentative agreement as described by congressional aides throughout the day. As part of the deal, congressional leaders proposed to sell 58 million barrels of oil from U.S. emergency reserves over six years starting in fiscal 2018 to help pay for an end to mandatory spending cuts, according to a copy of the bill posted to a congressional website.

Paul Ryan’s election as his successor, expected Thursday. “This is again just the umpteenth time that you have this big, huge deal that’ll last for two years and we were told nothing about it and in fact even today, were not given the details,” said Rep. If successful, the agreement would mark a final act for Boehner to clear some politically divisive legislation as Ryan takes over as speaker – assuming a majority of the House votes to put him in the top job in an election set for Thursday. Those increases would be offset by cuts in spending on Medicare and Social Security disability benefits, as well as savings or revenue from an array of other programs, including selling oil from the nation’s strategic petroleum reserves.

The newly assembled budget plan would restore order to Washington and remove the threat of budget and debt chaos — a premier goal of congressional Republicans like Senate Majority Leader Mitch McConnell of Kentucky, a key architect of the pact. Most importantly, we have affirmed that the full faith and credit of the United States is non-negotiable and inviolable.” The legislation would suspend the current $18.1 trillion debt limit through March 2017. Capitol Hill Democrats are likely to solidly support the agreement, although it gives greater budget relief to the Pentagon than it does domestic programs.

Outlined for rank-and-file Republicans in a closed-door session Monday night, the budget relief would total $50 billion in the first year and $30 billion in the second year. “Let’s declare success,” House Majority Leader Kevin McCarthy told Republicans, according to Rep. The $80 billion increase amounts to little more than 1 percent per year of the nearly $4 trillion annual federal budget, but carries the politically charged significance of breaking through agreed-upon spending caps that Republicans had praised as a rare display of responsible cost-control and Democrats criticized as a wrongheaded drag on economic growth. Nonetheless, the deal would represent a major breakthrough after years of gridlock in Congress, especially on fiscal issues, as each side compromised on core issues.

A chief selling point for Republican leaders is that the alternative is chaos and a stand-alone debt limit increase that might be forced on Republicans. A lot of conservatives disliked the measure and many on the GOP’s right flank are already swinging against the new one, which would apply to the 2016-17 budget years. “I’m not excited about it at all,” Rep. He called it “a two-year budget deal that raises the debt ceiling for basically the entire term of this presidency.” Boehner was pushed aside by conservatives in his own party after repeatedly turning to Democrats to pass must-do legislation in an era of divided government. Among the proposed spending cuts are curbs on Medicare payments for outpatient services provided by hospitals that have taken over doctors’ practices, and an extension of a 2 percentage-point cut in Medicare payments to doctors through the end of a 10-year budget. Boehner’s backing, the House moved with rare bipartisanship — employing an even rarer legislative maneuver — toward resolving another issue on the speaker’s final to-do list: reauthorization of the 81-year-old Export-Import Bank, the government’s lender of last resort for American exporters.

Negotiators looked to address two other key issues as well: a shortfall looming next year in Social Security payments to the disabled and a large increase for many retirees in Medicare premiums and deductibles for doctors’ visits and other outpatient care. The House voted, 246 to 177, to wrest a bill that would revive the bank’s charter from a hostile committee chairman and set it up for House passage on Tuesday.

About a fourth of Republicans joined all Democrats who were present in support of advancing the bill over the opposition of deep-pocketed conservative groups and the Banking Committee’s chairman, Representative Jeb Hensarling of Texas. Boehner’s goals in the talks by securing long-term changes in social programs, offsetting spending increases with corresponding cuts or savings; increasing military spending; achieving a net reduction in the deficit; and locking in an agreement on spending for the 2017 fiscal year. Democrats, too, said they had achieved their goals, particularly lifting the prior spending caps and by assuring roughly equal increases to military and nonmilitary programs.

Rank-and-file House Republicans, in particular, have been resistant to authorizing an increase in the debt limit without some accompanying adjustments to mandatory federal spending programs. They have voiced opposition even as financial experts warned of the potentially devastating economic consequences of a default, and noted that raising the limit merely covers previous expenses and does not authorize any new spending. Boehner was pushing through one last measure negotiated solely by the leadership, quickly began venting their anger on Twitter using the hashtag #zombiebudget. But talks seemed to falter after the majority leader, Representative Kevin McCarthy, abandoned his bid for speaker, and House Republicans wrestled with the question of who would lead their deeply fractured conference. Ryan, the powerful chairman of the Ways and Means Committee and one of his party’s leading voices on fiscal matters, announced that he would seek the speakership provided his colleagues rallied behind him.

Ryan to begin his speakership without a pending crisis, and potentially empower him to pursue some of the bold ideas he has put forward previously on tax and budget policy that helped catapult him to prominence and led to his being chosen as the Republican vice-presidential nominee in 2012. Boehner’s resignation, announced on Sept. 25, lent additional urgency to the talks, as it became clear that negotiations could prove far more difficult once a new speaker was in place. In addition, the accord calls for eliminating a provision of the Affordable Care Act, not yet in force, that would require businesses with more than 200 employees to automatically enroll their workers for health insurance. Such reallocations have occurred regularly over the decades but Republicans had opposed any new reallocation without changes to reduce costs of the program.

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