Budget battles will resume soon at a Congress near you

It’s hard to say which is less likely to occur: that the House of Representatives and Senate budget conference committee, meeting for the first time Wednesday to cobble together a bipartisan budget plan, will get anything done by its Dec. 13 deadline, or that its final product will be enough to keep the government from lurching from crisis to crisis.

“The current political atmosphere isn’t right for some sort of ‘grand bargain’; it’s too soon after the government shutdown,” said Robert Bixby, the executive director of the nonpartisan Concord Coalition, a budget watchdog group. “They don’t want to give up their talking points: that the Democrats want to claim that the Republicans want to throw grandma into the street and the Republicans want to say that Democrats are going to tax us into oblivion.”

But even producing a minimalist plan could prove daunting for the 29-member committee, chaired by House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Committee Chairwoman Patty Murray, D-Wash.

The formation of the committee was part of a short-term deal that reopened the partially closed federal government after 16 days and funds the government at $986 billion until about Jan. 15.

The committee has until Dec. 13 to produce a report for the full House and Senate to vote on. If the panel fails to produce anything, lawmakers probably will have to vote on another stopgap resolution to keep the government open.

The conference committee will attempt to seek common ground from cavernous differences between a $3.53 trillion budget that the Republican-controlled House approved last March and a $3.7 trillion plan passed by the Democratically held Senate.

Reconciling the two, each essentially a party manifesto, will be a challenge.

The House plan would repeal most of the Affordable Care Act, President Barack Obama’s legacy legislation. It also would significantly revamp Medicare and Medicaid and overhaul the nation’s tax code, in part by reducing the corporate tax rate and eliminating the alternative minimum tax.

The Senate’s plan leaves the health care law intact. It would reduce Medicare spending by $265 billion and cut Medicaid by $10 billion over 10 years without making major changes in the programs. It seeks to reduce budget deficits through nearly $1 trillion in tax hikes over 10 years, largely on corporations and wealthy earners.

“Chairman Ryan knows I’m not going to vote for his budget,” Murray said after a recent breakfast meeting with conference committee leaders. “I know he’s not going to vote for mine. We’re going to have to find the common ground between our two budgets that we both can vote on.”

Both sides appear to be aiming for at least a modest agreement to fund the federal government through the fiscal year, which ends Sept. 30, 2014. Some budget analysts say the panel could try to shift the debt ceiling deadline so it’s not a hot potato in an election year.

But even that may prove difficult with next year’s congressional elections and the 2016 presidential contest around the corner, they say.

“What you’ll basically see is a show, and if anything comes out of that show it will be a surprise,” said Dan Holler, a spokesman for Heritage Action, the political arm of the conservative Heritage Foundation. “The time for a ‘grand bargain’ is over. There’s as much blame on the right as there is on the left.”

Then there’s the automatic budget cuts known as sequestration, part of the 2011 Budget Control Act. Both parties don’t like the cuts – Democrats for their impact on social programs, Republicans for their effect on the military – but they’ve been at loggerheads from the beginning over how to replace them.

Time is of the essence: If Congress doesn’t act, the next round of the sequester will hit Jan. 15, slicing fiscal 2014 government spending to $967 billion, with the military bearing the brunt of the reductions.

The Republican members of the House Armed Services Committee sent a letter to Murray and Ryan last week urging them to take a hard look at loosening sequestration’s grip on the military budget.

“When the Budget Control Act was created, sequestration was meant to be a mechanism for enforcing deficit reduction through non-discretionary means,” wrote Rep. Howard “Buck” McKeon, R-Calif., the chairman of the committee. “Sequestration of discretionary accounts was never intended to be policy.”

Bixby and others think that conferees might rally around fixing sequestration. They envision a deal that involves some sort of short-term sequestration adjustment in return for changes in the tax and entitlement systems. Rep. Tom Cole, R-Okla., a negotiating committee member, said both parties were eager to deal with sequestration if they could get their numbers in line.

“We’re $90 billion apart,” Cole told Bloomberg TV. “I doubt we’ll end up in the Republican number or the Democratic number, but if we can’t come to a deal, the law specifies sequester numbers. And I don’t think that’s where the president wants to be. That’s not where we want to be.”

However, the Senate Democrats and the White House have signaled that they won’t budge without new tax revenues. A spokesman for Murray said she’d entertain spending cuts in a short-term or long-term deal only if they were accompanied by closing tax loopholes and deductions for corporations and wealthier Americans.