U.S. Budget Week: Coming Fiscal Talks to Focus On Sequester Fix

Published Oct 18, 2013. By John Shaw.

WASHINGTON (MNI) - If Congress were a first grader, and it has been called much worse recently, this would be the time that the teacher would escort the young student into a corner for a lengthy timeout to think about the consequences of recent bad behavior.

However, the agreement that was reached this week to end the 16-day government shutdown and avert a default on the nation's debt created a House-Senate budget conference committee to produce a report by Dec. 13.

So the congressional timeout will have to wait as Senate Budget Committee Chair Patty Murray and House Budget Committee Chair Paul Ryan go forward with their budget talks.

Ryan will chair the conference and Murray will serve as the vice chair because of the congressional tradition of alternating the chairmanship and vice chairmanship of conference committees. During the last congressional budget conference committee, a senator - then Budget Committee Chairman Kent Conrad - served as the chairman.

Ryan and Murray will preside over an unusually large budget conference committee with 29 members which is a size not generally conducive to productive negotiations. More ominously, it seems almost impossible to imagine how the Ryan budget, passed by the GOP majority in the House, and the Murray budget, approved by the Democratic majority in the Senate, can be reconciled.

Two examples show how different the budgets are: Murray's plan calls for $975 billion in additional revenues over a decade while Ryan's budget has no new revenues but does assume that expiration of several tax credits that would save about $160 billion over 10 years.

Also, the Murray budget assumes that $995 billion in future spending cuts mandated by the sequester will be replaced (but does not specify with what) while the Ryan budget assumes they will remain, but will be restructured so as to ease the cuts to defense programs.

Bill Hoagland, a long-time senior Republican budget aide and now a vice president at the Bipartisan Policy Center, said the Murray and Ryan budget's are irreconcilable given the continuing policy stances of the two lawmakers.

"Maybe these two budgets are from the same solar system, but just barely. They are certainly from different planets, Mars and Venus if you will. The best that could be hoped for is some kind of de minimus deal that adjusts the 2014 sequester spending levels a bit," Hoagland said.

Bob Bixby, executive director of the Concord Coalition agrees with this assessment. "It seems the most realistic scenario is for an agreement that makes adjustments to the sequester in 2014 and possibly 2015," he said.

"We need a broader agreement that deals with revenues and entitlements, of course. But given what we've been through and where the two parties are that does not seem likely. A narrow agreement can probably find some offsets to change the sequester with a blend of minor mandatory spending savings and user fees," Bixby said.

Ryan and Murray met Thursday morning with Sen. Jeff Sessions, the ranking Republican on the Senate Budget Committee, and Rep. Chris Van Hollen, the ranking Democrat on the House Budget Committee.

Murray emerged from the meeting and signaled that her talks with Ryan will consider "all" of the major fiscal issues, but indicated they will focus sharply on discretionary spending for the next year or two.

Murray said while she strongly disagrees with the fiscal plan passed by Ryan, she realizes that he disagrees with her budget so they need to focus on finding "the common ground."

"Our job is to make sure that we have put forward a spending cap and a budget cap for this Congress and the next year or two, or further if we can," she said.

Ryan said the mandate of the talks is to achieve "smart deficit reduction," which appeared to be a coded way of saying that he would like to adjust the sequester.

Ryan added it's "high time" that congressional budget leaders discuss their different budgets and try to "find out where we can agree."

Congress late Wednesday approved the fiscal agreement negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell that reopened the federal government and increase the statutory debt ceiling while work continues on broader fiscal issues. President Barack Obama signed the package into law shortly after it cleared the House.

The law funds the federal government through Jan. 15 and suspends the debt ceiling until Feb. 7. The government is funded at an annualized level of $986 billion until Jan. 15, the same day another $21 billion across-the-board sequestration cut is scheduled to take place.

The law also calls for convening a House-Senate budget conference committee to discuss longer-term fiscal issues, but budget experts say the two parties are too locked in for much to be achieved beyond adjusting the sequester.

"I just don't see a major deficit reduction package coming anytime soon. It would require Republicans agreeing to additional revenues, which they don't seem prepared to do, and for the Democrats to be willing to agree to changes to Medicare and Social Security, which won't happen especially if there are no revenues on the table," Hoagland said.