The White House and congressional Republican leaders are close to reaching a bipartisan budget agreement that would resolve the stalemate over government funding and, if implemented, shift the threat of another shutdown until well after the 2016 presidential election.
The $112 billion, two-year budget accord would roll back some of the impending sequester cuts to defense and domestic programs and ensure government funding is extended beyond the current Dec. 11 deadline, according to congressional aides familiar with the talks.
The package also would avert the risk of a credit default by raising the nation’s borrowing limit beyond the current Nov. 3 deadline.
Progress toward a budget accord came as a surprise to many who doubted the White House and GOP would be able to come to terms.
It would be one of the final legislative acts of House Speaker John A. Boehner, R-Ohio, who is preparing to step down this week after being forced to retire early by his party’s hard-right flank.
Boehner met with his leadership team Monday afternoon and convened rank-and-file lawmakers for a hastily called private evening session.
“Fiscal negotiations are ongoing,” said Senate 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.”
After abruptly announcing his retirement last month, Boehner had vowed to “clean up the barn” for his successor. Resolving the budget standoff would clear one of the most divisive issues from the agenda of Rep. Paul Ryan, R-Wis., who is expected to be elected as the next House speaker in votes this week.
The more legislation Boehner can muscle through the testy GOP-led House in the days ahead, the smoother the transition will be for Ryan.
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 or offered separately, according to congressional aides, who did not want to be identified speaking about the sensitive negotiations.
Votes on both issues are expected in a matter of days, before Boehner steps down.
Any effort to undo the sequester cuts and raise the debt limit without extracting GOP concessions is certain to run into sharp resistance from the party’s conservative base.
“In Washington, cleaning the barn is apparently synonymous with shoveling manure on the American people,” said Heritage Action Chief Executive Michael A. Needham. “John Boehner is clearly a rogue agent negotiating on behalf of well-connected special interests, not the voters that gave him the gavel.”
Liberal groups voiced their own concerns.
“The White House needs to know that any budget deal that cuts Social Security, Medicare or Medicaid benefits, or eligibility for those benefits is unacceptable to the American people and roughly equivalent to declaring a holy war on struggling working families,” said Jim Dean, chairman of Democracy for America.
White House officials cautioned Monday afternoon that there was no final agreement, but that negotiations would continue as long as progress was being made.
“We continue to urge Republicans to continue to engage constructively with Democrats to identify common ground and do the right thing for the country,” White House spokesman Josh Earnest said. “The good news is there’s a template for succeeding in this endeavor.”
For weeks, aides to congressional leaders and the White House 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 agreed to after a 2011 debt ceiling showdown. Both parties, for different reasons, have wanted to undo the sequester cuts.
Republicans have wanted to halt cuts to the Pentagon, while Democrats have sought to ease reductions to domestic programs.
Talks had dragged, though, as the two sides had tried to figure out how to pay for the increased spending.
Under the contours of the current talks, the deal probably would be paid for with a combination of budget cuts elsewhere, new fees and relying partly on an overseas contingency fund set aside for military operations.
The deal so far includes $66 billion more money for the remainder of fiscal 2016, and an additional $46 billion in the next fiscal year, which ends Sept. 30, 2017.
To pay for the increased costs, $32 billion will come from the overseas contingency account. 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 fund was not intended to be used for such a purpose.
The bulk of the costs, about $80 billion, would be paid for by clipping government programs and raising fees on others in ways that will cause political discomfort on both sides of the partisan line.
Democrats probably will object to cuts to the Social Security Disability Insurance program that would lower part of the benefits individuals receive based upon any wages they earn. Republicans probably will pan new tax filing fees.
The GOP will score a victory with another provision that would do away with an Affordable Care Act requirement that larger companies automatically sign up workers for health care unless the workers specifically opt out. Businesses have fought the requirement.
In a nod to Democrats, the deal is also expected to block price increases on seniors using Medicare Part B, halting forthcoming increases to their premiums and deductibles.
“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. “As I have been saying for years, it is past time that we do away with the harmful, draconian sequester cuts.”
Passage is a multistep process, giving opponents ample opportunity to derail the deal. Even if it is approved this week, a separate spending bill would still need to be passed by Congress to keep government running after the Dec. 11 deadline.
This final effort by Boehner could result in a politically heroic act to resolve looming crises despite deep resistance from the GOP majority in the House – or it could cement his standing among hard-right Republicans that his willingness to compromise with President Barack Obama makes him insufficiently conservative.
“Listen, this is not about us,” Boehner said last week. “Our job is to do the right thing for the American people every day. You have heard me say this multiple times, and I will say it one more time: If you do the right things for the right reasons every day, the right things will happen for our country.”
Also Monday, the House is expected to advance legislation to salvage the Export-Import Bank, a Depression-era financing entity that big business says is vital for exports but conservatives deride as crony capitalism.
This year, conservatives succeeded in beginning to shutter the bank by failing to authorize new lending. A brutal lobbying campaign over the bank has been underway on both sides of the issue.
A bipartisan majority in the House wants to revive the bank and pushed the vote forward with a rare “discharge petition” procedure that hasn’t been fully deployed since the 1970s.
Boehner is not expected to stand in their way.