Almost before the Republicans could celebrate final passage Tuesday of their long-sought after “balanced budget” plan, Senate Armed Services Committee Chair John McCain (R-AZ) was standing on the Senate floor demanding that Republican and Democratic lawmakers begin negotiating the real deal for the coming fiscal year.
Far from satisfied with the $38 billion in extra defense spending that GOP leaders managed to shoehorn into the budget for the fiscal year beginning Oct. 1, McCain wants a deal with the White House and Democrats to lift a $523 billion statutory cap next year so that the Defense Department can pump billions more into readiness and combating terrorism in the Middle East.
“I would tell my colleagues that we must work together in a bipartisan fashion to fix the damage that sequestration is doing,” McCain declared.
Democratic Sen. Debbie Stabenow of Michigan seconded McCain’s call for a bipartisan deal to supplant the Republican budget blueprint that just cleared the House and Senate. But the Democrats and President Obama insist that any deal must lift the cap on domestic discretionary spending as well as defense, in order to spare many of their favorite programs from deep cuts.
The 10-year GOP budget that cleared the Senate on a largely party-line vote of 51 to 48 was designed to gradually wipe out the deficit — now $468 billion — through spending cuts of $5.3 trillion; overhauling Medicare, Medicaid and other entitlement programs; and dismantling the Affordable Care Act.
Democrats including Sens. Chuck Schumer of New York, Richard J. Durbin of Illinois and Patty Murray of Washington State have spent hours on the floor berating the Republicans for threatened cuts in Pell Grant college scholarships, health insurance for as many as 27 million people covered by either Obamacare or Medicaid and other social safety net programs such as food stamps and school lunches.
The GOP budget crafted by Senate Budget Committee Chair Mike Enzi (R-WY) and House Budget Committee Chair Tom Price (R-GA) will have little real impact unless it is converted into the dozen appropriations bills needed to be passed by early this fall to avoid another government shutdown.
Yet the spending levels for domestic programs are so draconian that even many Republican lawmakers concede they would have a tough time passing on the House floor. “With the numbers we’re having to appropriate to, I’m not sure we can pass these bills,” Rep. Harold Rogers (R-KY), the chair of the House Appropriations Committee, told The New York Times this week. He added hopefully, “I think there’s a deal to be had.”
Republicans want to adhere to the $493 billion domestic discretionary spending cap for the coming fiscal year, including deep cuts in social safety net and educational programs. Democrats seem to almost take delight in daring the GOP to try to implement those cuts — and then explain them to voters in the 2016 campaign.
“Our Republican colleagues, when they are forced to actually put real numbers to these budget numbers in the appropriations process, won’t be able to do it,” Schumer said. “So this is a fun day for our Republican colleagues. They get to beat their ideological breasts, show the hard right that they really mean it, and then maybe we can go back to governing the country and helping the middle class.”
Republican leaders claim that their budget would be in balance within 10 years without having to raise tax rates. But their plan is riddled with budgetary and accounting gimmicks and assumptions that mask as much as $2 trillion of revenue shortfalls over the coming decade. Almost nobody seriously considers the non-binding document as a true road map to spending and tax policy.
Talk of jettisoning the dubious GOP budget plan and beginning a fresh round of legitimately bipartisan budget negotiations is spreading like wildfire on Capitol Hill and among budget experts and watchdogs. The deal many have in mind would breach the defense and domestic spending caps imposed by the 2011 Budget Control Act and spread enough additional money around to make everyone reasonably happy.
No one is talking about a “Grand Bargain” of major entitlement, spending and tax reform along the lines of those proposed by the Simpson-Bowles presidential deficit reduction commission of years ago. Instead, the focus is on a reprise of the mini-deal forged by Murray, the former Senate Budget Committee chief, and former House Budget Committee Chair Paul Ryan (R-WI) in the fall of 2013.
Robert Bixby, executive director of the Concord Coalition, a budget watchdog group, said on Wednesday that he expects to see a “mini-deal” that would include, among other things, raising the caps for both domestic and defense spending for another year or two, some offsetting cuts in mandatory spending and either fees or tax loophole closings that could be used to raise additional revenue.
Moreover, Congress and the White House must agree again to raising the debt ceiling by late fall to avert the threat of the Treasury defaulting on its obligations. A new debt ceiling would almost certainly be made part of any final budget deal, Bixby said.
“The trend lines are working in that direction,” he said. “I think it would be a relatively modest deal.”
Top Reads from The Fiscal Times: