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Congress and White House reach tentative budget deal (w/video)

House Majority Leader Kevin McCarthy, R-Calif., left, and Rep. Fred Upton, R-Mich., leave a meeting on Capitol Hill Monday.
House Majority Leader Kevin McCarthy, R-Calif., left, and Rep. Fred Upton, R-Mich., leave a meeting on Capitol Hill Monday.
Published Oct. 27, 2015

WASHINGTON — After five years of bitter clashes, Republican congressional leaders and President Barack Obama on Monday night appeared to settle their last budget fight by reaching a tentative deal that would modestly increase spending over the next two years, cut some social programs, and raise the federal borrowing limit.

The accord, which must be approved by the House and the Senate, would avert a potentially cataclysmic default on the government's debt and dispenses with perhaps the most divisive issue in the capital just before Speaker John Boehner is expected to turn over his gavel to Rep. Paul Ryan of Wisconsin.

Shortly before midnight, House Republicans posted the text of the 144-page bill, which was labeled a "discussion draft" but appeared to reflect the tentative agreement as described by congressional aides throughout the day.

The agreement would raise spending by $80 billion over two years, not including a $32 billion increase included in an emergency war fund. Those increases would be offset by cuts in spending on Medicare and Social Security disability benefits, as well as savings or revenue from an array of other programs, including selling oil from the nation's strategic petroleum reserves.

The $80 billion increase amounts to little more than 1 percent per year of the nearly $4 trillion annual federal budget, but carries the politically charged significance of breaking through agreed-upon spending caps that Republicans had praised as a rare display of responsible cost-control and Democrats criticized as a wrongheaded drag on economic growth.

Nonetheless, the deal would represent a major breakthrough after years of gridlock in Congress, especially on fiscal issues, as each side compromised on core issues. It frees Obama from budget battles as he looks to secure his legacy in the remainder of his second term, and gives clean starts to Ryan as speaker and to Republicans trying to persuade voters that they can be an effective governing majority.

For Boehner, the deal would deliver on his pledge to clean up "the barn" by dispensing of potential crises in a way that he hoped would silence critics who said he overpromised and underdelivered. Boehner was repeatedly caught in spending fights between hard-line conservatives in his own party and a White House eager to blame Republicans for any impasse, such as the government shutdown in 2013.

The Treasury Department had said that the government would default on its debt if the statutory borrowing limit was not raised by Nov. 3. And a temporary spending measure, which kept the government from shutting down at the start of October, will run out on Dec. 11.

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The tentative agreement reached Monday night would solve each of those problems. It would keep the government financed through Sept. 30, 2017, well after Obama leaves office. And, the debt limit would be raised — technically suspended, allowing the Treasury to borrow whatever it needs — until March 2017.

And while the annual spending caps would be raised for two years, the 10-year spending caps enacted in 2011 would remain in place. Those caps will frame spending negotiations between Obama's successor and leaders of the next Congress.

Rank-and-file House Republicans, in particular, have been resistant to authorizing an increase in the debt limit without some accompanying adjustments to mandatory federal spending programs. They have voiced opposition even as financial experts warned of the potentially devastating economic consequences of a default, and noted that raising the limit merely covers previous expenses and does not authorize any new spending.

Obama has repeatedly said that he would not negotiate over raising the debt limit and Republican congressional leaders have generally acknowledged that they would be forced to increase the government's borrowing authority one way or another.

Critics of the deal, who said Boehner was pushing through one last measure negotiated solely by the leadership, quickly began venting their anger on Twitter using the hashtag #zombiebudget.

Rep. Justin Amash, R-Mich., who is a member of the hard-right House Freedom Caucus, had posted his annoyance earlier in the day, saying, "It's another 'govern by crisis' deal that doesn't reflect the will of the House but rather the will of the speaker."

Boehner, who announced his resignation last month after years of being hounded by hard-line lawmakers on his party's right, had said he hoped to clear the way for his successor by dispensing with some tough issues. But talks seemed to falter after the majority leader, Rep. Kevin McCarthy, abandoned his bid for speaker, and House Republicans wrestled with the question of who would lead their deeply fractured conference.

That question was resolved last week when Ryan, the powerful chairman of the Ways and Means Committee and one of his party's leading voices on fiscal matters, announced that he would seek the speakership provided his colleagues rallied behind him. They did.

Ryan is set to be chosen as the Republican nominee for speaker on Wednesday and formally installed during a vote on the House floor on Thursday.

An accord to lift the debt ceiling and settle the spending impasse before then would free Ryan to begin his speakership without a pending crisis, and potentially empower him to pursue some of the bold ideas he has put forward previously on tax and budget policy that helped catapult him to prominence and led to his being chosen as the Republican vice-presidential nominee in 2012.

Ryan played a crucial role in the last major spending deal, which he brokered along with Sen. Patty Murray, D-Wash.

The current negotiations were largely conducted at the staff level, involving senior aides to Boehner, McConnell, Rep. Nancy Pelosi, the House Democratic leader, and Sen. Harry Reid of Nevada, the Democratic leader, as well as White House staff members.

While the four congressional leaders and Obama never met face-to-face in this round, aides said that there were frequent phone calls among the individual leaders as talks developed. Boehner's resignation, announced on Sept. 25, lent additional urgency to the talks, as it became clear that negotiations could prove far more difficult once a new speaker was in place.


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