Budget negotiators narrow in on possible deal

  • Article by: HEIDI PRZYBYLA and PETER COOK , Bloomberg News
  • Updated: December 5, 2013 - 9:56 PM

Compromise would reduce sequestration to one year.

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The two principal negotiators : House Budget Chair Paul Ryan, R-Wis., and his Senate counterpart, Patty Murray, D-Wash.

 

U.S. budget negotiators are narrowing a possible deal to ease automatic spending cuts to just one year amid objections from affected groups and lawmakers in both parties, said people familiar with the talks.

A compromise being crafted by the two leaders of a 29-member panel is drawing protests from Democrats and groups including federal employees, who could contribute more to their pensions under the proposal, and airlines, which could face higher fees. Some Republicans are concerned a bipartisan deal will replace spending cuts set in law with promises of future savings that might not be realized.

Congressional aides say Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., who are leading the talks, may urge the House and Senate to bring the accord directly to a vote, bypassing the bipartisan committee.

Both sides are “constantly working and talking,” Ryan told reporters Thursday as he left a meeting with House Speaker John Boehner. Asked if a deal could be reached for a vote next week, Ryan said, “I don’t know, we’re still talking.”

Boehner, at a news conference Thursday, said he’s “hopeful” Ryan and Murray can reach a deal that would pass both chambers.

The negotiators have been seeking to boost domestic and defense spending by $65 ­billion over two years to soften the effects of spending cuts on the Pentagon and programs including scientific and ­medical research and services for poor children.

One year instead of two

The deal now being ­discussed may alleviate some of the automatic spending cuts, known as sequestration, for one year instead of two, according to a congressional aide close to the talks.

“This deal is either going to be really pathetic or it’s not going to be a deal,” said Steve Bell, a former Senate budget adviser now with the Bipartisan Policy Center.

With both parties eager to avoid a repeat of the October federal government shutdown, the emerging compromise provides a framework to reach a deal on spending — either by the budget panel’s deadline or before federal spending authority expires on Jan. 15.

The developing accord doesn’t include an agreement to raise the nation’s borrowing limit, another potential ­fiscal showdown Congress faces early next year.

The menu of options Murray and Ryan are considering include raising the fees paid by airline passengers, or boosting the so-called Sept. 11 security fee on airline tickets. Budget experts estimate adjusting airline fees could save up to $11 billion to offset some ­automatic cuts.

Airlines for America, a Washington-based trade group for carriers including Delta Air Lines Inc. and US Airways Group Inc., greeted travelers and lawmakers returning to Washington airports this week with leaflets and air sickness bags marked: “Are higher taxes on air travel making you ill?”

Other options under consideration include $20 billion in changes to federal retirement programs that would increase worker contributions, and auctioning government-owned airwaves.

A group of 18 House Republicans, concerned that negotiators will trade spending cuts set in law for future savings that never materialize, are drafting a letter to Boehner in support of a spending bill of $967 ­billion. They may also object to using higher fees to offset the cuts. Negotiators had been discussing a deal with a $1 trillion spending cap.

“Democrats are not interested in solving the problems created by the sequester,” said Rep. Steve Scalise, a Louisiana Republican and chairman of the Republican Study Committee. “They are only interested in using the threat of the cuts as leverage to increase spending across the board, to increase our national debt, and to raise taxes and fees.”

Ryan has previously shared with GOP lawmakers ideas including increased premiums for pension plans backed by the Pension Benefit Guaranty Corp. and a cut in Medicaid payments to hospitals. Lawmakers including Sen. Jeff Sessions of Alabama, the top Republican on the Budget Committee, back a proposal to push some spending cuts to future years.

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