Budget talks stall before they even begin

Congress’ crucial effort to strike a year-end fiscal deal is faltering before it’s really started.

Republicans are demanding changes to entitlement programs, a request that’s already been rejected by Democrats. Democrats want boosts in domestic spending without painful cuts, a nonstarter for the GOP. Meanwhile, there’s no House speaker scheduled to serve past October. And private staff-level talks are making little headway, according to sources close to the negotiations.

To top it all off, the Big Four congressional negotiators still haven’t been in the same room.

“It’s such a hard equation to figure right now,” said one Democratic aide close to the negotiations. A meeting at the White House “has gotta happen soon.”

Congressional Republicans are trying to project confidence, particularly Senate Majority Leader Mitch McConnell, whose “no shutdown, no debt default” vows are paramount to his party’s hopes of maintaining Senate control in 2016. But the Senate GOP has a major uphill battle: McConnell lacks a stable negotiating partner in the House and conservative forces in both chambers already are agitated about making sacrifices in any bipartisan compromise. But Democrats have flatly refused to entertain changes to Social Security or Medicare — a key demand for many congressional Republicans.

“If there were really truly spending reforms, I think a lot of things could be done,” said Sen. Orrin Hatch (R-Utah).

All the pessimism has Democrats talking about shrinking the parameters of any eventual deal, casting doubt over the two parties’ ability to strike a two-year budget accord that staves off fiscal calamity through the election. Instead, a one-year deal could be the only viable option, they say.

Congress must pass new spending law before Dec. 11 if they want to stave off a government shutdown.

Still, there may be some hope for progress, and other sources noted two things: Though there have been several selected leaks about the private budget talks, the blame game has not started in earnest. And no one has walked away despite tense relationships among McConnell, Senate Minority Leader Harry Reid, retiring House Speaker John Boehner and House Minority Leader Nancy Pelosi.

And a White House budget summit has not been scheduled because staffers will do the heavy lifting of any deal, leaving little reason to increase pressure with high-level public meetings. Still, staff-level talks have produced little movement aside from McConnell floating entitlement cuts and Democrats batting them away.

Both parties still see benefit from an agreement to raise domestic and military spending and stave off future government shutdown threats. But it’s the specifics that threaten to derail everything and force another continuing resolution, derided by most people in Washington as bad government but the fail-safe solution if everything falls apart.

First, consider the budget caps established by the Budget Control Act’s blunt sequestration mechanism, opposed by many conservatives during their enactment in 2011 but now being protected zealously by the right. Speaker John Boehner’s former chief of staff Barry Jackson calls those budget cuts one of this decade’s greatest accomplishments for the GOP, and now McConnell has opened the door to renegotiating those spending caps — if he can get something in return from Democrats.

His members are not being shy about what they want.

“Kicking the can down the road isn’t a good idea … that means entitlement reform, which is where the big money is,” said Sen. Johnny Isakson (R-Ga.). “We got our feet wet on the [Medicare doc fix]. We ought to get a little more wet. We’re up ankle deep. Maybe we ought to go waist deep.”

Democrats say that’s far beyond the scope of something they would agree to, and they dismiss it as little more than a negotiating ploy.

“It is a nonstarter. And I know from leadership meetings with the House Democrats they feel exactly the same,” said Sen. Dick Durbin (D-Ill.), the No. 2 Democratic leader.

On the other side of the budget battle is McConnell’s defense of the spending caps. Don Stewart, a spokesman for McConnell said the leader is intent on adhering to sequestration’s overall spending levels of about $1 trillion in discretionary spending, lower than overall spending levels of 2012.

“As the leader has made clear, any increases in discretionary spending must be coupled with spending reductions elsewhere so that we can maintain the important curbs on spending that were passed in the BCA,” Stewart said.

Democrats say they see a possible compromise in McConnell’s stance, depending on whether Republicans demand dollar-for-dollar cuts to reach a spending deal or show more flexibility. A coalition of Democrats and GOP appropriators and defense hawks could shepherd a one- to two-year spending bill through the Senate, sources said, though it could be with a highly divided GOP caucus and with Democrats’ carrying the load.

Should he proceed down that path, McConnell must be willing to take heat from conservatives, who already are queasy about anything that might seem like a spending increase, regardless of how it’s packaged. Top Republicans note that the party’s right flank is unlikely to vote for a budget agreement or run-of-the-mill spending bill anyway, but given the divisions within the GOP and conservative bent of GOP presidential candidates like Sen. Ted Cruz (R-Texas), it could be a painful vote.

“It’s of great concern,” said Sen. Jeff Sessions (R-Ala.). “I don’t know exactly where Sen. McConnell is on that, but we should resist.”

Then there’s the rudderless House. Even if McConnell pushes through a bill through the more centrist Senate, there’s no guarantee that the next speaker would be able to swallow it, especially if Congress passes a clean debt ceiling increase that enrages the right. That would only make a bipartisan budget deal an even more controversial maneuver to conservatives.

One hope mentioned by Democrats is that Boehner stays on through the end of the year to cuts deals on the debt, infrastructure and spending, reflecting his vows to “clean the barn up” for his successor. But that path is no more certain than any other.

Read more: http://www.politico.com/story/2015/10/congress-budget-pessimism-214879#ixzz3p0w9GyuV