Bipartisan budget deal not a ‘grand bargain,’ but a good barn cleaning

Late Monday night Congressional leaders and the White House Reached a Tentative Budget Deal. The New York Times says the Budget Deal Isn’t Boehner’s ‘Grand Bargain’ but It Gets Job Done:

BarnIt is no grand bargain, but it is a big deal.

As he prepares to vacate the House at the end of the week, Speaker John A. Boehner helped engineer an $80 billion bipartisan budget agreement with the Obama administration that may fall far short of earlier visions of budget grandeur but would still get Congress through a potentially dangerous period for both the economy and itself.

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With just days remaining before the Treasury Department estimated it would run short of cash to pay the federal government’s obligations, the two leaders of the House and Senate majorities had no clear path toward raising the federal debt limit. Many House Republicans and some in the Senate refuse to vote for any increase in federal borrowing power no matter the dire circumstances. Support for a debt-limit increase has become a sure ticket to a primary challenge from the right for many of them.

But Mr. McConnell has repeatedly promised no default. And he and Mr. Boehner, with their ties to high-ranking allies in the business and financial worlds, knew that failure to head off a threat to the government’s creditworthiness could boomerang badly on Republicans just one year from Election Day.

While fiscal turmoil might energize conservatives demanding that Republicans hold firm against the Obama administration, it probably would not sit well with many other American voters as they watched their retirement savings plummet, their mortgage rates soar, their car and student loan costs climb and unemployment tick back up.

Now the tentative budget agreement gives the Republican leadership the chance to persuade a sufficient number of Republicans to join Democrats in approving an increase in the debt limit that should take the government into the administration of the next president.

In fact, if approved, the deal does much more — both politically and substantively.

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With passage of the deal, Mr. Boehner would make good on his promise to clean out the barn a bit for Paul Ryan and allow him time to get his feet under him as the new leader without having to face the nearly impossible job of rounding up votes for the debt limit increase.

It would give a little breathing room for more spending on politically popular domestic programs like health care research, federal law enforcement and the Coast Guard, while defusing tension between Republican hawks itching for more military spending and budget hawks demanding strict adherence to statutory spending limits. And it would avert premium increases of as much as 50 percent for millions of older people on Medicare, a potent political force.

The question remains, however, if the deal will weaken the conservative standing of Mr. Ryan — and upset his looming election — whether he had a hand in the negotiations or not.

And those conservative activists who helped push Mr. Boehner to an early retirement were not looking kindly on the agreement as details began to trickle out Monday. The group Heritage Action for America labeled Mr. Boehner a “rogue agent” working for special interests in his final hours.

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On the policy side, it potentially buys Republicans, congressional Democrats and the White House two years of relative budget peace by setting agreed-upon spending limits for this year and next, getting both parties through the election with a legislative truce that spares them tough political votes. It will then be up to the next Congress and president to renew the budget wars — or not.

For Democrats and President Obama, it provides the added domestic spending they had demanded and resolves some of the pressing problems they had seen in the Social Security disability fund.

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With spending levels set for the next two years, members of the appropriations committees believe they can return to the traditional process of crafting, debating and passing individual appropriations bills and have more impact on the way the government spends its money.

It is also a fitting coda for Mr. Boehner. He never did get his “grand bargain” of up to $4 trillion in sweeping tax and spending changes that he sought with Mr. Obama four years ago to right the country’s listing long-term fiscal ship. Those negotiations collapsed in acrimony — an outcome that colored the relationship between Mr. Boehner and the White House for the rest of his tenure and reduced the chance of legislative bargains between them.

But it gives him the right to say he took care of a few messes on his way out the door after a tenure where he was able to reduce overall federal spending, bring an end to earmarks and reach an earlier bipartisan agreement that resolved a long-running problem over Medicare fees for doctors.

It also provides one last opportunity to rile the conservatives who called for his scalp while acting in what he sees as the best interests of both the nation and the Republican Party. Mr. Boehner probably sees that as grand enough.

Greg Sargent of the Washington Post has a quick analysis of the budget deal in the Morning Plum: A temporary outbreak of sanity in Washington:

Late last night, Congressional leaders and the White House reached a big deal to avert default and keep the government funded. Now it has to be sold to members of Congress in both parties, and conservatives are already revolting.

The short version is that the debt limit will be raised and government will be funded for two years at higher-than-sequester levels, to be paid for by various spending cuts, including to entitlements. But an expert tells me that these cuts will not meaningfully harm Social Security or Medicare beneficiaries.

Here is a rough breakdown of who got what in this deal (and consider this very much subject to revision, as more information comes in):

What Democrats got:

— $40 billion in additional non-defense spending, over and above the caps imposed by the sequester, over two years

— a debt limit hike through March of 2017, meaning no more conservative-manufactured debt limit extortion through that date

— an end to conservative-manufactured government shutdown drama through the election and beyond

— a solution to a glitch in cost-of-living calculations that threatened to hike premiums for millions on Medicare Part B

— a reallocation of Social Security funds that Dems had sought to keep disability insurance solvent

What Republicans got:

— $40 billion in additional defense spending, over and above the caps imposed by the sequester, over two years, plus an additional chunk of defense spending in a side contingency fund. That is to say, an increase in defense spending overall that is higher than the increase in non-defense spending

— Medicare cuts, but (according to reports and experts) only on the provider side

— A tightening of eligibility requirements to the Social Security Disability Insurance program that experts say does not equal a benefits cut

— a debt limit hike through March of 2017, meaning no more conservative-manufactured debt limit extortion through that date

— an end to conservative-manufactured government shutdown drama through the election and beyond

— a solution to a glitch in cost-of-living calculations that threatened to hike premiums for millions on Medicare Part B

Careful readers will note that I’m arguing that both Democrats and Republicans got an end to debt limit and government shutdown extortion. There has long been a dominant fiction in Washington that agreeing to lift the debt limit somehow constituted a concession on the part of Republicans for which they should be given something in return by Democrats. In reality, Republican leaders themselves have wanted the debt limit increased — because default would hurt the country — and have acquiesced in the manufacturing of debt ceiling crises mainly in a vain quest to placate conservatives by making it look as if the GOP is “fighting” Obama. Thus, both sides have now been liberated from the need to do this any longer. Meanwhile, both sides wanted the fix to Medicare Part B. Both got that.

On Medicare and Social Security: Nancy Altman, the president of Social Security Works, a group that strenuously opposes benefits cuts and argues for their expansion, tells me that the deal “doesn’t actually cut benefits or really hurt beneficiaries who aren’t gaming the system.”

Altman says the Medicare cuts are all on the provider side, which could harm beneficiaries at some point, but it’s not a major concern. “On the Medicare side, they limited their cuts to far in the future, and to providers,” Altman says. “There’s time to correct that.”

On the change to Social Security, Altman says: “They stiffened the penalties for fraud, they extended nationwide efforts to make sure that payments are accurate and they closed a loophole in which people were gaming the system. They didn’t change eligibility requirements or reduce the level of benefits.”

Altman notes that Republicans had been threatening to demand serious Social Security and Medicare cuts in exchange for raising the debt limit, but adds this threat has been defused. “The hostage has been released,” Altman says.

It still remains to be seen whether today’s deal will pass Congress. But for now, it needs to be judged against the alternative: lower spending levels that would constitute a drag on the recovery; more debt limit and government shutdown crises, with a worst-case scenario involving widespread economic damage (which also could have hurt Dem chances in 2016); a deal in which benefits really were cut.

The Hill reports that even the Tea-Publican insurrectionists who want to shut down the government and crash the economy over not approving a debt ceiling increase are predicting that there are enough GOP votes to join with the Democrats to pass this budget deal. Budget deal expected to pass House:

Rank-and-file House Republicans predicted Tuesday that a two-year deal to raise the debt limit and increase spending levels will pass this week, averting a government shutdown.

Conservatives left the meeting grumbling about being cut out of the negotiations and given only a few hours to read the legislation before having to vote on it Wednesday.

But with the deadline to raise the debt limit a week away, they realize they have limited options.

Rep. Tom Cole (R-Okla.), one of Speaker John Boehner’s (R-Ohio) allies, predicted the deal would pass, though he expressed uncertainty over whether it could win majority support from the House GOP conference.

“Most deals around here pass,” he said, adding: “I think we should be able to get” a majority of the conference because most defense hawks and appropriators would vote yes.

Rep. Matt Salmon (R-Ariz.), a veteran conservative, also predicted passage.

“I think every Democrat will vote for it and there will be enough Republicans in the conference that ultimately the deal will be passed. That doesn’t mean I agree with it,” he said.

Two House Freedom Caucus members told The Hill as many as 100 House Republicans would vote for the deal, a combination of defense hawks and leadership allies.

“It will be a big bipartisan vote,” Majority Leader Kevin McCarthy (R-Calif.) told The Hill.

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Rep. Paul Ryan (R-Wis.), who is expected to be elected as Boehner’s successor on Wednesday, distanced himself from the deal.

He told CNN’s Manu Raju before the Tuesday morning GOP conference meeting that “this process stinks.” He did not speak about the deal during the meeting but has told colleagues in private meetings that he will be more inclusive when in charge of the House.

Some quick observations. The TanMan, unbound from his GOP crazy caucus because he is retiring, was free to negotiate a bipartisan deal with congressional Democrats and the White House. This is how government is supposed to work. The “new normal” of manufactured crises by Tea-Publican insurrectionists to take hostages and to make extortion demands is not how government works, and is not to be tolerated. Boehner has now taken away their hostages in this deal. It is up to the voters to remove these economic terrorists from the Congress. The vote on this bipartisan budget deal should be scored (looking at you Rep. Martha McSally).

This appears at first blush to be a good deal for Democrats and the White House. It is not the “grand bargain” with deep entitlement cuts that Democrats feared President Obama would agree to with Tea-Publicans several years ago. The reforms to social security and Medicare are modest, and sought by both political parties. Budget deal includes Social Security, Medicare reforms. Initial responses today are positive. Liberal Dems lining up behind budget deal, Senate GOP reaction to deal mostly positive, and AARP ‘strongly supports’ budget deal.

The TanMan, Weeper of the House John Boehner, gets the last word against the crazy sonsuvbitches in the GOP House Freedom Caucus who sought to remove him as Speaker. They cannot do anything to harm Boehner, but they could retaliate against his heir apparent, Paul Ryan, whom many of them now view as “Boehner 2.0.” It should be some interesting votes coming up.

6 responses to “Bipartisan budget deal not a ‘grand bargain,’ but a good barn cleaning

  1. ‘The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the US Government can not pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our Government’s reckless fiscal policies. Increasing America’s debt weakens us domestically and internationally. Leadership means that “the buck stops here.” Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better.’ Barack Obama, March 2006

    • We have to raise the debt limit because George W. Bush squandered the $5.6 trillion surplus that he was given by Bill and Hillary Clinton in January, 2001. He pushed through two tax cuts for the rich and started two misguided wars. More importantly, when he left office in 2009, the economy was in shambles, the worst financial situation since the Great Depression. Government tax revenues fell drastically, while the need for government services greatly increased. Quoting President Obama in 2006 is fine, but let’s also be very clear about what has brought us to this current state of affairs.

      • So let me make sure I understand. Someone starts digging us into a hole and the solution is to keep digging, is that it?

    • Tax cuts for the wealthy and corporations are known as “tax expenditures” because they are paid for by borrowing money and running a deficit. If you want to eliminate deficit spending, the U.S. has to tax at a rate sufficient to cover its debts. It’s just that simple.

  2. I’m not happy with the fact that defense spending got an additional contingency fund, which breaks the symmetry imposed by sequestration. I believe that we already spend far too much on defense, probably $300 billion per year too much. It is amazing that we still have tens of thousands of American troops in both Germany and Japan, 70 years after World War II.
    That said, the Democrats had already caved on this by voting in large numbers for the recent bloated Department of Defense appropriation, which the President vetoed.

    • I agree. By leaving the contingency fund in this budget deal, it relieves Congress of having to override President Obama’s veto. In the end, Obama gives Congress what they wanted in exchange for other things he wanted. And Congress still has not debated and voted on an AUMF against ISIS in Iraq and Syria.