THE White House and congressional Republican leaders reached a budget agreement on Monday, Oct. 26, that would resolve the stalemate over funding federal programs, and could end the threat of another government shutdown until the end of President Barack Obama’s term.
The two-year budget accord, which will cost roughly $80-billion, would increase spending somewhat on defense and domestic programs, raise the federal debt ceiling, and lift some of the automatic cuts–known as sequesters–repeatedly denounced by Obama.
The deal is likely to face opposition from both right and left sides of Congress. Earlier Monday, as news of the possible accord spread, some conservative groups denounced the additional spending as a betrayal, while some liberal groups warned against “the possibility that trims in benefits would be agreed upon to pay for parts of the agreement,” according to the Los Angeles Times.
The package also would raise the nation’s borrowing limit and avert the risk of a credit default, which could come as early as Nov. 3. The compromise deal is also expected to protect Social Security and block price increases on seniors who use Medicare beneficiaries, ending sudden hikes in their premiums and deductible rates.
“It’s a responsible agreement that is paid for in a balanced way by ensuring that hedge funds and private equity firms pay the taxes they owe and by cutting billions in wasteful spending,” a White House official said in a statement.
House Speaker John Boehner presented details of the pact in a closed-door meeting with rank-and-file lawmakers early on Tuesday, Oct. 27, hoping to advance it to a floor vote by the next day, and sending it to the Senate for passage.
Republican Rep. Paul Ryan, who is expected to be elected to the top job of House speaker on Thursday, Oct. 29, replacing the retiring Boehner, told Reuters that he was reserving judgment on the agreement until he reviewed its details.
Many who were surprised had doubted that the White House and Congressional Republicans could come to terms.
“Fiscal negotiations are ongoing,” said Majority Leader Mitch McConnell (R-Ky.) as he opened the Senate. “As the details come in, and especially if an agreement is reached, I intend to consult and discuss the details with our colleagues.”
The White House praised the budget deal Tuesday, Oct. 27 as a “responsible agreement aimed at economic growth and security for the middle class.”
Congress must agree to new spending for an array of federal programs by Dec. 11 to avoid the risk of another government shutdown during the rest of Obama’s term.
An administration official said that the deal, which would potentially end the threat of another shutdown, is a “compromise” that proves bipartisan cooperation is possible.
“It is promising that Democrats and Republicans in Congress were able to come together to reach a strong agreement that would break the cycle of shortsighted, crisis-driven decision-making,” the official said in a statement.
The measure to lift the nation’s debt limit, currently at $18.1 trillion, through March 2017 would be tacked on to the budget deal, according to anonymous congressional aides.
If Congress does not act quickly to raise the debt ceiling, the federal government could begin moving into default next week because the Treasury Department would no longer be able to borrow money to pay Washington’s bills, reported Reuters. Funds have been mostly exhausted.
The two-year budget deal that was negotiated provides top-line spending numbers. Appropriators will still have to hash out specifics by mid-December.
“The bipartisan budget package unveiled [Monday] represents real progress for hard-working families across the country,” House Democratic leader Nancy Pelosi said in a statement.
For several weeks, Congress and White House aides have been meeting behind closed doors on a possible budget deal. The aim has been to roll back some of the steep sequester cuts that were earlier negotiated, after a 2011 debt ceiling showdown. Both parties have been wanting to undo the sequester cuts, for different reasons.
Republicans have wanted to halt cuts to the Pentagon, while Democrats have sought to ease reductions to domestic programs. Talks had dragged, as the two sides tried to figure out how to pay for the increased spending, said the LA Times.
“The deal would adjust spending caps for two years by a total of $80 billion—$50 billion the first year and $30 billion in the second—equally divided between defense and nondefense spending,” according to an anonymous official familiar with the negotiations.
An additional $32 billion in spending over the two years will come from the overseas contingency account, bringing the total package to $112 billion. Republicans had suggested tapping that account before to boost military funding, but Democrats and even some Republicans argued it was an accounting gimmick because the emergency war fund was not intended for such a purpose.
The bulk of the costs would be paid for by trimming government programs and increasing federal fees on others, in ways that would cause political discomfort (regarding Social Security, businesses, the Affordable Care Act, etc.) on both sides of the partisan line.
“I hope that Democrats and Republicans will come to a resolution soon that is good for our country,” said Senate Minority Leader Harry Reid (D-Nev) earlier. “As I have been saying for years, it is past time that we do away with the harmful, draconian sequester cuts.”
A vote on the deal was expected to come as early as Wednesday. Under the plan, higher borrowing authority would be in effect until March 2017.
