On Tuesday, five of Washington’s biggest budget players appeared on stage in Washington to offer their takes on the nation’s finances. But in a telling sign of just how far apart President Obama and congressional Republicans are, each of them appeared alone. They answered questions individually and never shared the spotlight at The Fiscal Summit sponsored by the Peter G. Peterson Foundation.
Presumably, if the five – Senate Budget Committee Chairman Patty Murray, D-Wash., House Budget Committee Chairman Paul Ryan, R-Wis., White House economic adviser Gene Sperling, Rep. Chris Van Hollen, D-Md., and Sen. Rob Portman, R-Ohio – were all in synch, Congress and the White House would hammer out an agreement on the deficit, entitlement spending and tax reform in record time.
Instead, Obama is scheduling another golf outing with congressional Republicans in search of support, but he’ll probably get teed off. (Sen. Saxby Chambliss (R-GA) hit a hole in one during Obama’s latest outing with lawmakers on Monday.) And congressional leaders refuse to sit down in a conference committee to reconcile the differences in the budget resolutions passed by the House and the Senate.
With the prospects of yet another showdown over the debt ceiling looming, the White House, Senate Democrats and Republican House leaders couldn’t be further from a major budget deal. Before reconciling the competing measures, Ryan and other House GOP leaders want informal assurances from the Democrats that an agreement would be to their liking.
This means the Democratic-majority Senate would have to say goodbye to the $900 billion additional tax hike in its budget and scale back their spending ambitions. Murray noted that the House-passed budget was laced with “non-starters,” including a ten-year deadline for wiping out the deficit and converting Medicare for seniors to a voucher-style program.
“There is no evidence we are getting closer to an agreement,” Van Hollen, the ranking Democrat on the House Budget Committee, said during the high profile fiscal conference that also included former President Bill Clinton and Microsoft founder Bill Gates.
Ryan was even more emphatic: “I don’t think we’re going to have a ‘Grand Bargain’ [because that] implies you’re going to fix the problem. But when you have the majority party in Washington unwilling to embrace the kinds of reforms that make Medicare solvent or make Social Security solvent – and Medicare is one of the big drivers of our debt in the future – I don’t see a Grand Bargain happening.
“So the question is, can we make divided government work and can we get a down payment on the problem?” Ryan nicely framed the dilemma. “Can we buy the country time and fiscal space? That’s what we’re shooting for. Something that’s realistic. We don’t want to overpromise and under deliver.”
But the Wisconsin congressman didn’t have an answer to his own question, and he didn’t speculate on what could happen. Over the past two weeks, Democrats have publicly berated Republicans for their handling of the budget process and refusal to appoint negotiators to begin thrashing out a compromise budget resolution for the fiscal year that begins Oct. 1.
For years, House Republicans have sharply criticized the Senate for failing to adopt an annual budget resolution and then reconcile its differences with the House as part of “regular order.” But now that Senate Democrats have finally produced a budget package, House Republicans are wary of beginning formal negotiations – which could lead to a deal that includes more in tax revenue.
“I want to get a deal. I want to get an agreement,” Ryan said. “But I don’t want to go to conference just for the sake of going to conference . . . If we go to conference and have a month long stalemate in conference, what ends up happening are people dig into their position, and it’s that much harder to get an agreement at the end of the day.”
But if the past is prologue, then any compromise will be tied to averting yet another government-made crisis. The government’s $16.4 trillion of borrowing authority technically maxes out on May 18, although the Treasury can likely employ a number of financial maneuvers to keep the government afloat through late summer or early fall. “The president has been very clear – he’s not negotiating on the debt limit,” Sperling said yesterday. “When the president saw what happened in 2011, saw the hit to confidence, the hit to our economy, the hit to our standing, I think he made the right decision--which is that he is simply not going to negotiate on the deficit.”
Sperling, the director of the National Economic Council, also warned that the administration would reject a Republican measure almost certain to pass the House on Thursday that would instruct Treasury Secretary Jack Lew to prioritize which debts to pay first to avoid a default if the statutory debt ceiling is reached. “Prioritization is default by another name,” Sperling said. “It is not a proposal to prevent default; it is a proposal that says who do you pay first when you’re in default.”
Despite the administration’s insistence it would refuse to negotiate another debt ceiling deal, Portman told the gathering yesterday that it’s almost a given that the renewed threat of a possible default will force the two sides to the table again.
“I would argue that every single one of the half dozen proposals that actually worked to reduce spending in Congress in the last three decades has come out of this same process,” Portman said. “It’s a good leverage point because the American people get it. They don’t want us to extend [the government’s borrowing authority] without dealing with the number one problem [of the debt].”
Portman added that with lawmakers facing reelection next year, they almost certainly will want to get budget and debt ceiling negotiations out of the way this year. “This year is deal or bust,” he said.
Pete Peterson, who is the chairman and namesake of the foundation, also funds The Fiscal Times, an independent news and opinion organization, as a private venture. The Fiscal Times is not associated with The Peter G. Peterson Foundation.