Budget negotiators playing ‘Small Ball’
December 11, 2013 12:00 AM | 766 views | 1 1 comments | 9 9 recommendations | email to a friend | print
Come Friday, whether or not it is finished with its work, Congress plans to leave town until next year for its holiday recess.

For the first time since 2011, the lawmakers may do so with a budget agreement in hand. If they do, it will count as a success but only because, says the budget-watching Concord Coalition, the bar has been set so low. The Washington Post says the agreement, which still must pass several more hurdles, “amounts to little more than a cease-fire.”

The agreement addresses no serious budget issues, like tax and entitlement reform and corporate tax loopholes, but it would preclude a government shutdown over agency spending and buys time for Congress, if it is so inclined, which it is probably not, to tackle those issues.

The agreement partially repeals the sequester, the automatic across-the-board budget cuts, which have caused so much political grief and, while the final figures are still in flux, raise the cap on federal agency spending to $1.015 trillion for each of the next two fiscal years.

The pact was negotiated behind closed doors by Patty Murray (D-Wash.) and Paul Ryan (R-Wis.) the chairs respectively of Senate and House budget committees. The agreement seems to have strong support from the 29 members of their joint House-Senate conference committee, but it still faces several obstacles.

There are outstanding disagreements over how much more federal workers should be required to contribute to their pensions; how much money the government could raise from the sale of broadcast spectrum; a $5 increase in airline ticket fees to help fund the TSA; and Senate GOP leader Mitch McConnell’s insistence on an overall budget cap of $967 billion.

House Democrats, led by former Speaker Nancy Pelosi, are insisting that emergency unemployment benefits, due to expire at the end of the year, be extended another year. But what seemed like a deal-breaker at the end of last week now seems susceptible to compromise.

House Speaker John Boehner said that he would “truly entertain” any White House plan for extending those benefits, and Pelosi’s chief budget negotiator, Rep. Chris Van Hollen (D-Md.) said as long as there were guarantees the benefits would be extended, that provision need not be included in the budget agreement, which would make voting for it more palatable to some lawmakers.

The budget agreement has one glaring drawback: While it will marginally slow the growth of the national debt, now $17.3 trillion, it will do nothing to actually reduce it. That’s a problem for next year or the year after or the year after that ...
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moliere
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December 11, 2013
This budget deal makes sense given that the economy is still very fragile. The unemployment rate is 7%, but that doesn't take into consideration the historically low labor force participation rate, or the fact t hat the economic recovery is due in large part to stimulus by the federal reserve that is keeping interest rates low, a policy that will have to be paid for down the line.

Of course "conservatives" (and by this I mean partisan Republicans) would love a "budget deal" that contains deep spending cuts because they know that it would cause the economy to go into another 2008 type tailspin. That would allow them to both claim to conservatives that they cut spending and claim to everyone else that Obama is the cause of the horrible economy, making GOP prospects easier for 2014 and 2016. Naturally, this isn't in the interests of the Democrats, and it also isn't in the interests of the country.

Let's increase the labor force participation rate and get the economy back to where it will grow without either stimulus, dot.com bubbles or housing/real estate bubbles and THEN we can start talking about conservative ideas like spending cuts. And yes, spending cuts should take priority over tax cuts for anyone who is actually serious about eliminating the deficit and reducing the national debt. "Conservatives" haven't been about either since the Reagan era (remember, it was George H. W. Bush who coined the term "voodoo economics", not a liberal Democrat) and that has to change.
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