New chance for budget deal
The New York Times said the following in an editorial:
The only thing clear about the momentous budget conference now under way on Capitol Hill is what will not come out of it: an agreement to set the economy on a promising course with new investments that will create jobs and improve education. Republicans, locked into the iron suit of austerity, refuse to consider any spending that might stimulate economic growth.
Nonetheless, there is still a possibility that the conference could do something useful. Both Republicans and Democrats have their own concerns about the automatic cuts known as the sequester, and if they can find a way to ease those spending caps, it would remove a significant drag on employment. It would also end the reductions of government services that are hurting millions of people, especially those with low incomes.
The conference, composed of the budget committees of the House and Senate, should have begun in the spring after each chamber approved a budget. Republicans refused repeated requests to meet, however, afraid of any agreement that might represent a compromise from their hard-line positions. That intransigence eventually led to last month’s government shutdown. And when embarrassed Republican leaders finally agreed to reopen the government, they also agreed to let the committees meet to hash out a budget for the rest of the 2014 fiscal year.
But with just five weeks before a conference report is due on Dec. 13, Rep. Paul Ryan, the chairman of the House Budget Committee and of the conference, has yet to put forward a proposal. As a result, no one knows whether Republicans will be willing to raise revenues, a fundamental ingredient of any serious offer.
Democrats have already agreed that any increases in the sequester limits will have to be offset somehow, to avoid raising the deficit. That in itself is a concession to the austerity mind-set; the deficit has fallen precipitously, and more spending now would benefit the economy.
But raising revenue, most likely by closing tax loopholes, would still be a good trade-off for ending or limiting the sequester. One Republican congressman on the committee, Tom Cole of Oklahoma, said recently that he was open to revenue increases, including reducing the carried-interest loophole that allows many investors to keep their taxes low. That’s a promising sign of flexibility. Republican defense hawks, who fear the big cuts to the Pentagon coming in next year’s sequester, are also pressuring their budget leaders to reduce those cuts with new income.
If Ryan would agree to those requests, an agreement could probably be concluded quickly. But, at the opening session of the conference last week, he said a “down payment” was needed on the debt — as if that payment hadn’t already been made — and pointed to the rising costs of Medicare and Social Security. Fortunately, the leading Democrat on the panel, Senator Patty Murray of Washington, has made it clear that long-term entitlement changes will not be traded for short-term sequester relief.
The path to a deal, even a small one, is clear, if Republicans will finally agree that each side must give up something for the larger good.