US Budget Pact Emerging – But Can It Pass? | Defense News |


WASHINGTON — US House and Senate budget negotiators have agreed to key elements of a 2014 budget resolution, but it is far from clear they have enough votes to pass it.

Defense and congressional sources seemed confident a budget conference committee led by House Budget Committee Chairman Rep. Paul Ryan, R-Wis., and Senate Budget Committee Chairwoman Sen. Patty Murray, D-Wash., would reach an accord by Dec. 6.

But as one day faded into the next, it became clear that striking even a “small” two-year spending deal that both parties could support would prove as difficult as every other attempt to fashion a spending and deficit measure since President Barack Obama took office and conservative tea party Republicans joined the House.

“They might have a deal,” said Gordon Adams, who ran national defense budgeting for the Clinton administration, “but whether or not it can pass is a very different question – and a very interesting one.”

One defense industry lobbyist with knowledge of the Ryan-Murray talks laid out a scenario under which Democratic and Republican leaders could force the 2014 budget resolution and accompanying two-year spending plan through both chambers.

“In the House, it would need Democratic support. The conservative Republicans aren’t going to vote for it. But it can pass,” the lobbyist said. “In the Senate, I think you get the defense folks: McCain, Graham, Ayotte and some others,” the lobbyist added, referring to GOP Senate Armed Services Committee members Sen. John McCain of Arizona, Sen. Lindsey Graham of South Carolina and Sen. Kelly Ayotte of New Hampshire.

Analysts agreed the road is smoother in the Senate. But the House is the wild card.

“The GOP tea partiers have made clear on these bills: Not now. Not ever,” Adams said. “If the spending caps are adjusted, they’re going to be very unhappy. So the question is, what does that do to Boehner?”

The decision-making in recent months of House Speaker Rep. John Boehner, R-Ohio, has been influenced by the most conservative members of his caucus. So if those 50 or more members object, and other Republicans follow with re-election looming, Boehner would face the tough decision to pass the bill with Democratic support.

The November 2014 midterm elections could be key, Adams said, with enough members on both sides weary of voters’ disgust with a dysfunctional federal government.

Defense News reported Dec. 4 that the Ryan and Murray panel was moving in on a final deal that would provide sequestration relief to the Defense Department and other agencies in 2014 and 2015.

Defense sources said the panel is likely to propose $45 billion in sequestration relief in 2014, to be split evenly between defense and non-defense discretionary accounts. In 2015, the total relief would be about half that, again split evenly.

“Taxes and entitlements are off the table, so they had to find cuts elsewhere and came up with $85 billion of cuts and revenues, drawing a distinction between revenues and taxes,” the defense industry lobbyist said. “Twenty billion of the $85 billion would go to deficit reduction to keep Republicans happy, and the rest would go for partial sequester relief government-wide over the coming two years, half to the Pentagon, so about $15 billion a year in relief, depending the final deal.”

The lobbyist said: “This is the smallest of the small deals, but it’s something.”

Congressional aides late in the week did not dispute those details.

It was unclear at posting whether the committee will propose raising spending caps set by the 2011 Budget Control Act to provide that relief or do so with other federal spending cuts.

While analysts were sketching political avenues for passing an eventual spending resolution, there were signs Dec. 6 that both parties — as they have for three years — were digging in on issues central to their ideologies. Such entrenchment has prevented Congress from passing everything from annual appropriations and authorization bills to a sequester-killing “grand bargain” fiscal accord.

House Democratic leaders, for instance, made it clear the final Ryan-Murray plan must include benefits for unemployed Americans.

“It is absolutely essential that we extend the benefits. Economists agree that unemployment benefits remain one of the best ways to grow the economy in a very immediate way,” House Minority Leader Rep. Nancy Pelosi, D-Calif., told reporters.

Democratic Whip Rep. Steny Hoyer of Maryland, who might have to sell the plan to enough members of his caucus to pass it, told reporters it is increasingly clear that many GOP members want to keep all remaining nine years of sequestration, including the defense cuts.

“It might just survive because it’s so short-term,” Adams said. “It gets the politicians past the elections, and they would be done with this stuff — which everyone is tired of — for two years. And, let’s face it, a two-year deal is a long-term deal for Congress.”

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