December 09, 2013
Congressional leaders are preparing to unveil a last-minute budget deal that could be quickly jammed through the House.
It looks like a deal could be unveiled as late as Wednesday, just two days before the House is scheduled to recess for the rest of the year.
Wednesday is the last day a bill can be filed in the House to allow a Friday vote without going around House rules.
Releasing the bill that late in the week could be the best way to cut off a rebellion from the right, and conservatives on Monday were already expressing wariness.“I’m resigned to the fact that fiscal conservatives always lose at Christmas,” said Rep. Mick Mulvaney (R-S.C.).
For party leaders, voting quickly and at the last minute has an advantage because it leaves less time for activists and lobbyists to attack the compromise.
After all, you can’t key-vote legislation if you haven’t seen it.
On Monday, the conservative Heritage Action, which has helped push GOP leaders to the right in past fiscal talks, released a statement that criticized the pending deal, even though no concrete details of it have been released.
Heritage warned that it will oppose any budget deal that reverses the automatic spending cuts known as sequestration in exchange for “inadequate” spending cuts later.
“Heritage Action cannot support a budget deal that would increase spending in the near-term for promises of woefully inadequate long-term reductions,” the group said in its statement. “While imperfect, the sequester has proven to be an effective tool in forcing Congress to reduce discretionary spending, and a gimmicky, spend-now-cut-later deal will take our nation in the wrong direction.”
Though the House is scheduled to leave Friday, lawmakers have some leeway on funding the government. The current funding expires Jan. 15, meaning Congress has some time to pass a measure next month to keep the government operating.
Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), the chiefs of the House and Senate Budget committees, were still putting the finishing touches on a small budget plan on Monday.
Their work has been delayed by policy disagreements on the size of the package, how much of the annual $91 billion in sequester cuts will be replaced, the nature of the replacement cuts and whether new spending on jobless benefits would be part of the deal.
At this point, the deal is likely to replace less than half of the automatic cuts scheduled for 2014 and 2015. It would leave major entitlements and the tax code untouched and would not extend federal unemployment benefits.
That might not be enough for conservatives.
“Will I trade a dollar worth of sequester savings today for a dollar worth of mandatory savings 10 years from now? No way in hell,” Mulvaney said in an interview. “That’s just not going to happen. I can’t vote for that, and I’d be surprised if anyone could.”
“That being said,” Mulvaney added, “would I trade a dollar’s worth of savings today for four or six or eight dollars of savings in the future? Yeah, maybe.”
Similarly, Rep. James Lankford (Okla.), chairman of the House Republican Policy Committee, said his party could support a 2014 spending level above the $967 billion in place under the sequester.
“I’m not married to a certain sequester number,” he said. “I’m married to deficit reduction.”
The airline industry and associated unions and federal workers unions have been working overtime to stop the emerging deal because they would essentially be asked to pay for it.
Transportation Security Administration fees could be hiked $2.50 by the deal. User fees hold some appeal because they are not strictly tax rate increases, something that is anathema to most Republicans.
Airlines 4 America, the industry lobbying group, argues the fee hike is a tax increase.
“We fully expect that if a budget deal is achieved, one of the revenue increases will be a TSA fee increase,” A4A’s Sean Kennedy said. “We make it a point of calling it a tax increase.”
It is unclear how effective the argument will be. The House-passed Ryan budget contained the fee increase, and it gained nearly universal support in the GOP conference.
A Ryan-Murray deal would survive conservative opposition if it can garner sizeable support from Democrats.
But Democrats could turn against the deal over a number of issues, including the lack of an extension for jobless benefits or opposition to reducing retirement benefits for federal employees, something else that is on the table.
Murray has pushed to reduce cuts for federal workers, but that’s been a challenge because of President Obama’s budget, which proposed raising $20 billion by increasing the employee contribution to the federal defined benefit plan from 0.8 percent to 2 percent.
Supporters of the cut argue that federal worker benefits are overly generous. They point to a Congressional Budget Office study that found benefits are 48 percent greater for federal workers than for private sector workers.
The American Enterprise Institute’s Andrew Biggs said state workers get a slightly better payout but average a 6 percent contribution.
Federal workers get Social Security, a traditional pension and employer matching through the Thrift Savings Plan.
Under some scenarios, working for the federal government long term can yield double the retirement payout compared to the private sector.
Biggs ran the numbers on a lifetime federal employee making $60,000 and found a base income of $57,000 in retirement compared to $29,000 for a comparable private sector worker.
He also argued that reducing the benefits wouldn’t hurt the government.
“It is not having trouble filling most jobs,” he said.
Employee unions have enlisted Rep. Chris Van Hollen (Md.), the top Democrat on the Budget Committee, to try to get a better deal. They argue that federal workers, who have been in a three-year pay freeze, are just about the only ones who have to sacrifice whenever a budget deal is struck.
“I would put the chances of an agreement right now at maybe 50-50,” Van Hollen said Monday on MSNBC. “There’s no reason that federal employees should take it on the chin as part of this agreement when federal employees have disproportionately contributed to the deficit reduction efforts to date.”