White House, Congressional Leaders Reach Tentative Budget Deal

27 Oct 2015 | Author: | No comments yet »

Budget Deal Isn’t Boehner’s ‘Grand Bargain’ but Gets Job Done.

House Speaker John Boehner heads to the floor for votes after a GOP conference meeting at the start of his last week in the House of Representatives. 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.The White House and Congress have reportedly struck a deal to raise the debt ceiling and fund the government through March 2017 — making it the last piece of budget policy in Barack Obama’s presidency.

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. Boehner helped engineer an $80 billion bipartisan budget agreement with the Obama administration that may fall far short of earlier visions of budget grandeur but would still get Congress through a potentially dangerous period for both the economy and itself.

Boehner (R-Ohio) and Senate Majority Leader Mitch McConnell (R-Ky.) declared. “We will make it our job to prove the skeptics wrong.” So far, alas, the skeptics have been right. The bill would set spending levels through September of 2017 in an effort to return to the regular government funding process, a deal aides say would raise the spending caps set in place in 2011 that would result in deep cuts to both defense and non-defense spending, called sequestration.

You might suppose that the answer to that question, which was no until a few days ago, is now yes—the yes-man being Paul Ryan, the promising young fellow who achieved global fame as Mitt Romney’s running mate. 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.

To pay for the additional spending, the deal would extend the sequester’s cuts to Medicare, sell off some of the country’s strategic petroleum reserve (even though oil prices are near rock bottom), do more telecommunications spectrum auctions, and change the crop insurance program which provides subsidies for farmers. It would also take budget showdowns and government shutdown fights off the table until after the 2016 presidential election, a potential boon to Republican candidates who might otherwise face uncomfortable questions about messes in the GOP-led Congress. The bipartisan agreement would include long-term entitlement reforms to the Social Security Disability Insurance (SSDI) program — the first major reform to Social Security since 1983. What he did do, eventually, was to express a tentative, reluctant willingness to Speaker: he allowed that, if certain conditions were met, he would condescend to accept.

The emerging framework would give both the Pentagon and domestic agencies two years of budget relief of $80 billion in exchange for cuts elsewhere in the budget. The 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. 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, R-Calif., told Republicans, according to Rep.

If the deal happens, it would represent a significant breakthrough after years of gridlock in Congress, especially on fiscal issues, as each side compromised on a core issue. It frees Obama from budget battles as he looks to secure his legacy in the remainder of his second term, and gives clean starts to Ryan as speaker and to Republicans trying to persuade voters that they can be an effective governing majority. That means he won’t be put in the position of having to keep the government open without pissing off House conservatives — the same impossible place that Boehner’s been in for years, and from which he’s currently fleeing. White House Press Secretary Josh Earnest would not give out any details on the “progress that is being made” on the budget discussions during his daily press conference. Boehner, with their ties to high-ranking allies in the business and financial worlds, knew that failure to head off a threat to the government’s creditworthiness could boomerang badly on Republicans just one year from Election Day.

Still, Ryan faces the same challenge that brought down Boehner and McCarthy: the Freedom Caucus, which not only spurns bipartisan compromises but has made its first goal to purge the GOP of its moderates. If Hillary Clinton or Bernie Sanders wins in 2016, and Republicans keep the House, Ryan will have to negotiate then, but in the meantime he can focus on his true passions, like privatizing Medicare, slashing domestic spending, and cutting taxes.

But conservatives in the conference who drove Boehner to resign were not ready to fall in line. “This is again just the umpteenth time that you have this big, big, huge deal that’ll last for two years and we were told nothing about it,” said Rep. Boehner was repeatedly caught in spending fights between hard-line conservatives in his own party and a White House eager to blame Republicans for any impasse, such as the government shutdown in 2013.

And, amazingly, some Freedom Caucus members consider Ryan, a thoroughgoing conservative by any traditional definition, to be dangerously moderate too. It’s also a major policy victory for Ryan, in that it closely mirrors a deal that he struck as House Budget Committee chairman with his then-Senate counterpart, Patty Murray, in December 2013. An official briefed on the negotiations said the deal fulfilled all of 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.

By agreeing to spending levels two years in advance, Congress would theoretically avoid the spending fights that have resulted in short-term stop-gap funding bills that Congress has passed in recent years. Now the tentative budget agreement gives the Republican leadership the chance to persuade a sufficient number of Republicans to join Democrats in approving an increase in the debt limit that should take the government into the administration of the next president. He requires his interns to read “Atlas Shrugged.” His treason consists solely of what Steinhauer calls “flashes of pragmatism,” such as questioning the wisdom of shutting down the government and/or forcing the Treasury to default on its obligations.

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. They restored about $63 billion in funding; the current deal reportedly restores about $80 billion, outside of the contingency budget, so they’re of roughly the same magnitude. He could compromise (i.e., surrender) on some of his demands, such as his unrealistic insistence on getting the formal endorsement of every single House Republican faction—thus suggesting that he buckles under pressure. Or he could stick to his guns (as is his right under the Second Amendment), withdraw, and be blamed for consigning his party to endless chaos, failing to step up in the hour of Republican need, etc.

However, passage is far from certain, as a wide array of Congressional conservatives are already vocally criticizing the deal, if stopping short of outright opposition. The caucus asked him to promise that he would never allow a floor vote on any measure unless a majority of Republicans supported it (the “Hastert Rule”); Ryan agreed. Putting off future fights regarding government funding until 2017 would allow Ryan the ability to get a handle on the position and the conference before having to chart a path forward. This was a fairly easy matter to fix; in the past, Congress has addressed similar shortfalls by simply redirecting more Social Security payroll taxes to the disability program as opposed to old-age payments.

Offsetting spending cuts that would pay for domestic spending increases included curbs on certain Medicare payments for outpatient services provided by hospitals 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. 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. It would give a little breathing room for more spending on politically popular domestic programs like health care research, federal law enforcement and the Coast Guard, while defusing tension between Republican hawks itching for more military spending and budget hawks demanding strict adherence to statutory spending limits. 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.

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. 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. A lot of conservatives disliked that measure. “It is past time that we do away with the harmful, draconian sequester cuts,” said Senate Minority Leader Harry Reid, D-Nev. “We must also ensure that there are equal defense and nondefense increases.” Just days are left for the deal to come together before Ryan is elected Thursday to replace Boehner, R-Ohio, who is leaving Congress under pressure from conservative lawmakers angered by his history of seeking compromise and Democratic votes on issues like the budget. Until now, the group has maintained its influence by wielding an undivided bloc of about 40 votes, just enough to deprive Boehner or any other speaker of his working majority.

Critics of the deal, who said Boehner was pushing through one last measure negotiated solely by the leadership, quickly began venting their anger on Twitter using the hashtag #zombiebudget. Charlie Dent, R-Pa. “He said he was going to try to clean the barn and this is a good start.” There also could be pitched battles over possible Republican attempts to add “riders” to the spending measure, such as ending federal funding for Planned Parenthood because of its abortion practices.

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. Boehner a “rogue agent” working for special interests in his final hours. “In Washington cleaning the barn is apparently synonymous with shoveling manure on the American people,” said Michael A. At a Monday press briefing, White House spokesman Josh Earnest said: “We continue to urge Republicans to continue to engage constructively with Democrats to identify common ground” to complete a budget and debt limit deal. Export-Import bank moved a step closer to revival Monday as Republicans and Democrats approved a rarely successful maneuver to force a vote to renew the trade lender’s charter. The move effectively bypasses Jeb Hensarling, R-Texas, House Financial Services Committee chairman, who has fought to close EXIM and has blocked legislation to revive it.

EXIM, which helps finance U.S.-produced goods and services bought by foreign customers, has been unable to lend or provide loan guarantees and trade insurance for nearly four months, causing some companies to lose export deals and move jobs overseas. Tea Party organizations are already raising money from supporters with appeals to stop any more Ryanesque budget deals. “Whatever our differences, we’re all conservatives,” Ryan told House Republicans last week.

Opponents of the trade bank accuse it of providing taxpayer-funded “corporate welfare” for wealthy corporations including aerospace giant Boeing and industrial conglomerate General Electric. Also, Speakers speak, and Trump is very good at speaking, as he has regularly proved on television, not only as a budding politician but also as a “reality” star—and reality, with or without scare quotes, is something of which the Republican Party is sorely in need.

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. Like the guy who, just last week, bluffed CNBC into immediately yielding to his demand that the next G.O.P. debate be an hour shorter and an opening statement longer? Such reallocations have occurred regularly over the decades but Republicans had opposed any new reallocation without changes to reduce costs of the program. Obama and Democratic leaders had insisted that any increases in military spending be matched with equal increases in spending on nonmilitary programs.

But it gives him the right to say he took care of a few messes on his way out the door after a tenure where he was able to reduce overall federal spending, bring an end to earmarks and reach an earlier bipartisan agreement that resolved a long-running problem over Medicare fees for doctors. Ryan’s political business plan called for him to spend the next four years as the respected (among conservatives) chairman of the House Ways and Means Committee, followed by eight triumphant years in the White House, followed by a comfortable retirement at the Ryan Presidential Library and Foundation.

He can go down in the annals of politics and entertainment as a curiosity, a footnote: the flamboyant mogul who ran for President on a lark, threw a scare into the regulars for a while, got bored and/or boring, and went back to his perch at Trump Tower and the tabloids. McConnell, Representative Nancy Pelosi, the House Democratic leader, and Senator Harry Reid of Nevada, the Democratic leader, as well as White House staff members. But, for a conventional Republican politician like Ryan, given the nihilistic ungovernability of today’s G.O.P. caucus, the Speakership is a gravestone. 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.

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