Yesterday, the House and Senate members of the budget conference committee met officially to begin deliberations on a 10-year plan for taxes and spending that would replace automatic sequestration.
The bipartisan committee was established in the deal agreed to by the White House and the Congress to end the government shutdown and avert a government default. The committee has until December 13 to report on its plan.
House Budget Committee chair Rep. Raul Ryan (R-WI) and Sen. Patty Murray (D-WA) head the 29-member committee composed of seven House members (four Republicans and three Democrats) and the compete Senate Budget Committee (12 Democrats and 10 Republicans).
While some held out hope that the committee would work to conclude a broad agreement (so-called “grand bargain”) on spending cuts and revenue and entitlement reform, it now appears that, at best, it will concentrate its efforts on the one issue that everyone seems to agree on: find a way to end the automatic cuts required by sequestration.
In a joint statement before the committee convened, Rep. Ryan and Sen. Murray said they want to “find common ground and work toward a bipartisan deal.” Seeking to limit expectations about the committee achieving a broad deal, the co-chairs said they “intend to focus on what we can achieve. We hope we can reduce the budget in a smarter way [and] restore stability to the budget process and end the lurching from crisis to crisis.”
When the meeting opened yesterday, both Ryan and Murray voiced cautious optimism in their opening statements. “We’re here because we want to get an agreement. We want to get something done. For too long, both parties have ignored our growing national debt—and the threat it poses to our country,” Ryan said. Murray expressed a similar sentiment. “I am hopeful we can at least show that bipartisanship is possible, that we can work together to solve some problems, and that we can break free from the gridlock and dysfunction that has dominated our nation’s capital for far too long,” she said.
The problem with this optimism is that the partisan intransigence about how the sequester should be replaced has not changed. Republicans continue to demand cuts in entitlement program spending and reject tax increases and most “revenue enhancements.” Democrats continue to reject cuts to entitlement programs and demand some revenue increases. In the past few weeks there has been some softening in these views. The White House has hinted that it might be open to some technical changes in how inflation on benefits is calculated, for example, and some Republicans seem open to at least discussing some revenue reforms. However, these informal comments are hardly enough to warrant optimism on reaching an agreement in today’s highly-charged, partisan political environment.
Meanwhile, there are only six weeks left before the committee must report. If the committee can reach an agreement, it may be possible (as some have speculated) to agree on an alternative that replaces at least $200 billion in sequester cuts over the next two years or provides agencies with additional flexibility on how to implement the cuts. This would delay the day of reckoning until after the 2016 mid-year elections.
But, what if they can’t reach agreement? Sequestration cuts will be implemented for FY2014 in January and the government would run headlong into the end of the current CR on January 15 and the debt ceiling suspension that ends February 7. And this brings up with the possibility of another government shutdown.
So, there is a lot riding on the ability of the conference committee (and its co-chairs) to show that it can, as Sen. Murray said, “work together to solve some problems.”
[…] co-chair Rep. Paul Ryan (R-WI), appear unwilling to accept any tax increase to forge a deal. In the first committee meeting, while expressing hope that the committee could work together to get an agreement, Ryan said that […]