Saturday, May 26, 2018

Behind the scenes, some budget cuts may not be that hard

WASHINGTON — Saving billions of dollars in anticipated federal spending, at least for a while, may not be that difficult.

Democratic and Republican leaders are in general agreement over less controversial trims and changes to a host of federal programs, such as federal retirement, state policies on Medicaid, farm subsidies and others.

The changes aren't the big-ticket, widely publicized measures that spark instant headlines or fiscal splashes. But added up, they would provide the kind of projected deficit reduction that could become a vital part of any deal to avoid the "fiscal cliff."

Unless Congress acts, the nation will plunge over that cliff in January as Bush-era tax cuts expire and $109 billion in automatic spending cuts take effect.

White House and congressional staffs are expected to present a framework for negotiations early next week, and President Barack Obama and top congressional leaders will attempt to grind out a compromise.

The talks are likely to aim at both a short-term fix and a grand bargain. The bigger package would be a multitrillion-dollar plan aimed at breaking the government's annual string of trillion-dollar-plus deficits. Consensus is that such an effort is too ambitious and complex to be finalized in the next five weeks, but negotiators could at least set the framework and a deadline for a 2013 deal.

Insiders now expect any such bargain to include three general parts. The thorniest two pieces involve raising revenue with major alterations to income tax rates and deductions, and revamping expensive entitlement programs such as Medicare and Social Security.

Both involve the kind of big-money savings pact that has eluded lawmakers for years. Medicare spending alone consumed 15.4 percent of the federal budget in fiscal 2012, and its share is expected to grow to 19.3 percent over the decade. The system's hospital trust fund, financed largely by taxes on employers and employees, is expected to be depleted by 2024. But attempts to cut benefits or effect major structural changes have met fierce resistance.

The third area of budget talks is likely to involve the "smaller" items, the so-called easy stuff likely to be an integral part of the shorter-term fix. Blueprints for those plans, which can involve less spending and special "user" fees, are already in place, thanks to 2011 bipartisan negotiations as well as detailed reports from two independent commissions.

"There's enough on the spending side so they could work that kind of (short-term) deal," said Robert Bixby, executive director of the Concord Coalition, a nonpartisan budget research group.

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