Cynical Americans Aren’t Banking on a Budget Deal
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The Fiscal Times
December 10, 2013

Americans could get an early Christmas gift in the form of a budget deal from Congress that would cancel a second round of across-the-board sequester cuts and avoid the risk of another government shutdown.

Democratic Senate Budget Committee Chairwoman Patty Murray and GOP House Budget chairman Paul Ryan may announce an agreement in the next day or two to achieve that goal.

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Yet the public has experienced so many fiscal crises this year that it remains highly skeptical Congress will actually reach a budget accord to head off another government shutdown in mid-January when the current stop-gap spending measure is scheduled to expire.

A new McClatchy-Marist poll released on Monday shows that 68 percent of respondents are pessimistic that lawmakers will strike a deal.

“Of course they’re pessimistic,” said Ross Baker, a Rutgers University political scientist. “I think they’d be surprised if [the negotiations] didn’t go down at the last minute. Given the propensity of these midnight salvations in Washington, it would be par for the course. Nobody would be particularly surprised. Nobody would be particularly elated either.”

Baker added, “To go through all of this and end up with something very modest would certainly be a victory in only the most technical sense.”

The emerging budget agreement is certainly not something either side can boast about. As described by staffers, the plan would repeal the sequester for at least the next two years while raising discretionary defense and domestic spending in each of those years to slightly more than $1 trillion.

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The plan does not even approach a “grand bargain” of major tax and entitlement reforms once sought by President Obama and House Speaker John Boehner (R-OH), or other measures aimed at addressing the long-term debt.

Instead, the agreement would offer an additional $65 billion in spending above existing caps during that period. To offset those added costs, Ryan and Murray are seeking consensus over alternative policies for raising revenue – including cuts to federal employee pension benefits and increased fees for airline passengers.

Pressure from Mini-Revolts
Unless Congress intervenes by approving a budget deal, the second year of automatic, across-the-board cuts mandated by the 2011 Budget Control Act will begin to kick in early next month. The Pentagon and defense hawks on Capitol Hill have warned that the new cuts would undermine troop readiness and national security, while other lawmakers and policy experts fret about cuts in FBI enforcements, National Institutes of Health research, Head Start and other programs.

As the deadline approaches, Democratic and Republican leaders are trying to tamp down mini-revolts by members at both ends of the political spectrum. Boehner and Majority Leader Eric Cantor (R-VA) face growing opposition from conservative GOP lawmakers and organizations like Club for Growth and the Heritage Foundation, which would prefer preserving the sequester to increasing overall spending.

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Republican leaders will need a substantial number of Democratic votes to push an agreement through the House– as they did in ending the 16-day government shutdown in October. Meanwhile, liberal Democrats and other close allies of federal employees are balking at some of the provisions, including Ryan’s effort to force government workers to pick up more of their pension costs.

On MSNBC on Monday, Rep. Debbie Wasserman Schultz of Florida, the influential chair of the Democratic National Committee, said she “wouldn't bet the farm” that Congress would reach a compromise this week. 

Congressional aides say the negotiators are still trying to clear obstacles to an agreement. Among them are: 

  • Cutting federal employees’ retirement benefits. Ryan has previously proposed $130 billion in cuts over a decade by asking federal workers to pay more into their pension programs, while President Obama has previously proposed a level around $20 billion. Ryan is now pushing for $17 billion to $20 billion in cuts, while Murray is trying to reduce the scope of the cuts or kill them altogether, according to aides. Highly influential Washington, D.C. area lawmakers, including Senate Appropriations Committee Chairwoman Barbara Mikulski and House Minority Whip Steny Hoyer, both of Maryland, vigorously oppose Ryan’s efforts.

  • Unemployment insurance. Murray and other Democrats are pressing for a $25 billion extension of emergency benefits for the long-term unemployed that are set to expire at the end of December and cut off 1.3 million people. Boehner has not ruled out the provision, but wants to consider it outside the framework of the budget agreement. Some Republicans question the need for an extension of the benefits, after the unemployment rate dropped to 7 percent in November.

  • Higher security fees for the nation’s airlines. Conservative lawmakers reportedly are balking at a proposal to raise fees on airline tickets to pay for TSA agents. The airline industry is lobbying hard against the proposal, noting that over the past four decades, the tax burden on a typical $300 round-trip ticket has nearly tripled from $22 to $61.

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Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.