Why the GOP Is Dragging Its Feet on Budget Talks
Business + Economy

Why the GOP Is Dragging Its Feet on Budget Talks

iStockphoto/The Fiscal Times

Congressional Republicans spent the past few months blasting Senate Democrats for not passing a budget these past three years. But when Democrats cleared a proposal 50-49, the GOP found itself a little like the dog that had chased the car – but then didn’t know what to do with it.

The next step is obvious: Form a conference committee to reconcile differences. This is how the “regular order” called for by House Speaker John Boehner, R-Ohio, and Budget Committee Chairman Paul Ryan, R-Wis., is supposed to function.

But that request seems to ring hollow after Senate Dems finally approved a new budget last month containing $975 billion in tax hikes over 10 years, almost the diametric opposite of the House-passed budget.  Those tax hikes are the real stumbling block.

Boehner and Ryan now say they want budget leaders from the two chambers to initially meet behind closed doors for a “pre-conference” chat to determine whether a compromise budget is feasible, before formally appointing negotiators to begin talks. “It is ‘regular order’ for the budget chairs to agree to a framework before conferees are named, and Chairman Ryan and Sen. [Patty]  Murray are having those conversations,”  Michael Steel, a spokesman for Boehner, told The Fiscal Times this week. But Senate Majority Leader Harry Reid, D-Nev., contends the Republicans are violating an agreement to undertake formal budget talks once the two chambers had passed their versions of the fiscal 2014 budget blueprint.

After clamoring for months for the two sides to sit down at the bargaining table, Reid told reporters yesterday, “Now all of a sudden, Republicans aren’t interested in regular order.”

Reid tried to appoint the Senate conferees Tuesday morning by offering a resolution on the floor that required the unanimous consent of his chamber, but the Senate Republican minority blocked his effort.

Republicans fired back that they’re trying to be realistic about the limits to budget talks for two sides that are so far apart, especially over whether to try to eliminate the deficit within 10 years, as the GOP has proposed. “It is difficult to see what Senator Reid’s stunt [to try to appoint conferees before the House was ready] will do to help if Senate Democrats don’t even agree we need to balance the budget in the first place,” Steel said.

Other lawmakers and budget experts, however, say House Republicans are wary of falling into a trap by agreeing to engage in talks under congressional budget rules that could lead to the kind of “Grand Bargain” that President Obama is seeking, which would include tax increases as well as spending cuts and entitlement reforms to reduce the long-term debt.

Sen. John Thune (R-S.D.) told The Fiscal Times yesterday the two sides may be too far apart to work through their differences, particularly when the Democrats are “inflexible” on the tax issue.

“It’s very hard to feature an outcome when you’re that far apart to start with,” Thune said. “So if they would be willing to back off of that demand that they get a huge new tax increase, it might make it easier to get to a conference where we could actually reach a conclusion.”

Another possibility is that the Republicans might be delaying budget talks with the Democrats and Obama until May 18, when the Treasury’s $16.8 trillion in borrowing authority officially runs out and once again becomes a bargaining chip.

The Treasury in the past has used a series of financial gimmicks to extend its borrowing authority while Congress and the president negotiate a new debt ceiling level. It can be expected to do something similar this year that would carry the government through the summer.

Steve Bell, senior director of economic policy at the Bipartisan Policy Center, warned that if the Republicans refuse to go to conference, “They will be giving a hammer to Democrats who will say, ‘Wait a minute, you guys have been bitching and moaning about us not having a budget for three year now, and now we have a budget and you refuse to talk to us and negotiate with us.’

“I think politically that message is pretty powerful,” he said.

On the other hand, Bell and other budget experts say the Republicans would be running a big risk by entering into budget talks with the Democrats and agreeing to abide by 30-year-old congressional budget reconciliation rules that could put them on the path to a spending and tax compromise they don’t want.

“I don’t think they want to go to conference because they are very concerned that whatever comes out in the form of reconciliation instructions may lead to tax increases,” Bell said. “That, of course, is radioactive in their minds.”

The last time the two chambers of Congress passed budget resolutions and worked out their differences in conference was a very long time ago indeed – 1997. But back then, Republicans controlled both the House and Senate and Democrat Bill Clinton was in the White House.  Joseph J. Minarik, formerly of the Clinton administration budget office, disagreed with the GOP statement that “pre-conference” meetings on the budget were a standard practice. “Not in my experience,” said Minarik, now with the Committee for Economic Development.

In the highly likely event the House and Senate negotiators fail to work out a compromise after 20 calendar days, the minority Democrats in the House would be able to offer a motion on a daily basis, instructing the House conferees on how they should proceed in trying to strike an agreement with the Senate. Those motions to instruct, as they’re called, could insist on higher taxes or more spending for budget items such as veterans’ health care and Medicare.

“The possibilities are endless, and the Democrats could do this every day,” Minarik said. “It’s time consuming and stressful, particularly for the majority, because the minority is going to do everything it can to put together a motion that paints the majority into the corner.”

The effort would be led by Rep. Chris Van Hollen of Maryland, the ranking Democrat on the House Budget Committee. Yesterday, Van Hollen demanded that House leaders appoint conferees to get the talks rolling. “Congressional Republicans were quick to criticize the Senate and the President for standing in the way of a timely budget process – but they are now the only ones standing in the way,” Van Hollen said.