Budget deal on the horizon ... or not

No one expects a Grand Bargain this time around on a budget for FY2014 or any other year, and thankfully this time no one bothers to pretend that the possibility exists of finding one.  After the shutdown two months ago, expectations have been scaled back significantly, and now everyone just wants a way to get spending questions settled to the end of the fiscal year and fight the next battle in the midterms.  That provides some common ground and an opportunity to quietly settle matters.


Will that happen? It depends on which news media one reads.  Politico sounds a hopeful note on negotiations between House Budget chair Paul Ryan and his Senate counterpart Patty Murray:

House and Senate negotiators are pushing to finalize a small-scale deal to set spending levels and replace sequester cuts for the next two years, a potential respite in the bitter budget wars consuming Congress.

The two congressional budget leaders — Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) — are considering a plan that would give relief to some of the domestic and defense programs most burdened by the sequester through 2015 by replacing those cuts with budgetary savings in other areas, according to sources familiar with the negotiations. New revenue through fee increases — not tax hikes — is likely .

The emerging plan also would attempt to find a middle ground between overall federal spending levels sought by Ryan and Murray in their respective budget plans. Under one proposal still under consideration, overall discretionary spending levels would be set in the $1 trillion range for 2014, sources say. That’s an uptick from the $967 billion spending level under the Budget Control Act but lower than the $1.058 trillion level initially sought by Senate Democrats.

If the two sides agree to that approach, the increase in spending would be split about evenly between defense and nondefense spending, sources said. Roughly $80 billion of the sequester cuts would instead be shifted to other programs in the federal budget, but overall deficit reduction would remain unchanged.

On Monday evening, Ryan said little of the talks beyond: “We’re making progress. We’re talking.”


The Hill, on the other hand, offers a dash of cold water and a missed deadline:

Congressional budget conferees on Monday failed to meet a deadline set by appropriators for a top-line budget number.

The blown deadline raises the odds that Congress will need at least a stopgap spending bill to keep the government running after Jan. 15.

Appropriators had called on the House-Senate conference to get a deal by Dec. 2 to ensure they had time to complete detailed spending bills, but the informal deadline was never endorsed by the leaders of the conference.

The disconnect comes from the two different tracks taken in budget negotiations.  The primary track is between Ryan and Murray, and they are taking their time to make sure they have a deal they can sell to their respective sides. It sounds as though they are close to cutting a deal that could pass, giving a little on the details of the sequester but leaving it almost entirely in place.  As long as that flies under the radar — and the holidays are a good time for that — Harry Reid probably won’t balk at it, and John Boehner will get plenty of votes for it in the House with or without Nancy Pelosi.

However, the conferees need to get this deal as quickly as possible.  The deadline mentioned by Erik Wasson at The Hill is one aimed at allowing the normal budget mechanisms to work in both chambers for easier passage of whatever deal Ryan and Murray make. The GOP is nervous about any delay because of an automatic cut to Defense spending of $20 billion in the absence of a change in the sequester.  Democrats might like having that hanging over Republican heads, but they’d like to get their budget set well before the midterm battles make spending an issue again, too.


If Ryan and Murray cut a deal acceptable to leadership in both chambers this week, I’d expect Boehner to put off the House recess scheduled for December 13th to help it pass, and Reid to make similar arrangements in the Senate.  But the pair will need to work quickly.

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