Budgetary Tunnel Vision: No Early Light at This End

Posted November 12, 2013 at 11:54am

Updated 4:32 p.m. | One month before their no-penalty-attached deadline, budget negotiators will convene Wednesday morning for only their second public meeting. There’s still no sign anything was accomplished behind the scenes since the opening session two weeks ago — except maybe a downgrading of the already de minimis expectations.

As a practical matter, a grand bargain fell off the table almost as soon as the government reopened in October, and ever since then, the scope of the talks has been narrowed to one modest topic: how much discretionary spending to permit in the final two-thirds of this fiscal year.

The range of the dispute is, at most, $50 billion — the difference between sticking with the second hatchet-fall of the sequester in the middle of January, which is what many conservative Republicans are all about, or increasing the grand total for appropriations 3 percent above the current amount, which is the number even the most liberal Democrats are dreaming about.

The one point of bipartisan agreement is that any pull-back from the sequester will have to be accompanied with dollar-for-dollar offsetting deficit reduction.

In the abstract, that decision represents a significant concession by Democrats, who have been less committed to additional long-term deficit reduction than Republicans. That’s one reason the chief negotiator for her party, Senate Budget Chairwoman Patty Murray, D-Wash., looks to insist that the formal chairman of the 29-member conference committee, House Budget Chairman Paul D. Ryan, R-Wis., goes first in unveiling an opening bargaining position on behalf of the GOP.

Ryan, who is under intense scrutiny from his side’s tea party faction, has made it clear he’s not open to raising any additional tax revenue as part of an offset package.

Murray, who is representing President Barack Obama’s position in the talks, is just as adamant that some of the offsets come from ending tax breaks that benefit wealthy individuals and corporations.

Only if that seemingly intractable dispute is resolved will the negotiators be able to wade into discussing even the most modest limitations on entitlement programs. That’s the richer fiscal vein where the president and GOP leaders agree the bulk of money to “pay for” an easing of the spending strictures should properly be found — especially if this year’s talks are to contribute anything toward forestalling subsequent swipes of the sequester scythe, which are otherwise on course to keep coming until the end of the decade.

The almost sure bet is that a breakthrough is out of the question in the two weeks before Thanksgiving, and the odds look only a little better for a framework by Dec. 13, the date set in the end-the-shutdown agreement for conferees to finalize a budget resolution agreement. While Murray looks to have been handed deal-making proxies by both the president and the Senate Democratic leadership, it’s not clear whether Ryan has been given comparable authorization from his leadership (let alone his hard-liner colleagues) to strike whatever he views is the best available bargain.

Any deal at all would represent an anomalous achievement to close out the first half of the 113th Congress. With the possible exception of the farm bill, Republicans in the House and Democrats in the Senate look likely to spend the closing weeks of the session at legislative cross-purposes — each half of Congress acting on things in which the other half has minimal interest.

The only tangible consequence for missing the Friday the 13th mark is that anxiety about budgetary brinkmanship would start building — potentially hobbling the holiday economy just as the shopping season (already shortened by a quirk in the calendar) enters its climatic final 10 days.

The next binding deadline remains Jan. 15. That’s not only when the current stopgap spending authority runs out, but also when year two of the sequester kicks in. Absent an enacted alternative, overall spending is sliced to an annual rate of $967 billion from the current $986 billion — with almost the entire $21 billion cut assigned to the Pentagon to absorb, and domestic programs essentially frozen at current levels.

Democrats are expecting those looming defense cuts will persuade Republicans to relax their no-new-revenue bargaining position. GOP leaders say their rank and file are much more willing to live with the next round of cuts than Democrats expect.

That’s because there’s a solidifying sense in the Republican ranks that the first months under the sequester haven’t been so bad, even for the military — certainly not as harsh as Obama and many in his administration warned. In part, that’s because many departments have been able to use accounting maneuvers and reserve funds to avoid furloughs and keep government services running pretty close to normal. What the rank and file have yet to absorb is that many of those bookkeeping aides won’t be available a second time.

Without a top-line compromise, appropriators will lack the starting point they need for writing a line-by-line omnibus spending package. Under the best of circumstances — a sequester-easing deal blessed by Congress just before heading home for Christmas — filling in the thousands of blanks in such a measure would probably take until the time lawmakers return the week of Jan. 6.

Otherwise, the only responsible course around a second potential shutdown will be a relatively straight-jacketed continuing resolution, at new sequester levels, lasting through the end of fiscal 2014 in September.

Would a Congress with record-low approval ratings even think about keeping this mess in limbo into the new year?

Well, can this same Congress be reasonably expected to perform otherwise?