Senate passes bipartisan budget agreement


Senate Budget Committee Chairman Patty Murray (D-Wash.) discusses the compromise spending plan during a television news interview on Capitol Hill in Washington, D.C. Wednesday, Dec. 18, 2013. (J. Scott Applewhite/AP)

Congress declared a holiday truce in the budget wars Wednesday, sending President Obama a blueprint for funding the government through 2015. But the next skirmish was already on the horizon: an election-year fight over the national debt.

The budget deal that passed the Senate on Wednesday amounts to a handshake agreement to avoid a government shutdown when a temporary funding measure expires Jan. 15. However, the accord does not address the need once again to raise the debt limit, setting up a potentially complicated confrontation in late February or early March.

That fight would come just months before midterm congressional elections, and the GOP is deeply divided over tactics to deal with the debt, a core issue for the Republican base. Some conservatives are calling for another showdown, insisting on an additional round of spending cuts in exchange for granting the Treasury Department more borrowing authority to pay the nation’s bills.

But GOP leaders, especially in the House, have no appetite for another Washington fiscal crisis that could destroy their popularity among voters, aides said. Instead, they are hoping for a more peaceful resolution modeled on the latest budget deal — a bipartisan compromise that solves small problems and aims to offend almost no one.

“Republicans kind of look at this election as probably the best opportunity we’ve ever had at taking control” of the Senate, said Sen. James M. Inhofe (R-Okla.). As a political message, threatening to default on the debt “hasn’t really worked all that successfully in the past,” he said.

Washington Post economic columnist Neil Irwin tells you everything you need to know about the new budget deal — in two minutes. (Sarah Parnass/In Play/The Washington Post)

As they rushed to finish work and leave town for a three-week Christmas break, senators were more inclined to bask in the glow of the budget deal than to plot strategy for the debt limit. The agreement draws to a close nearly three years of fighting over agency budgets — battles that repeatedly risked shutting down the government and actually did close parks, museums and federal offices for 16 days in October.

Congressional leaders appointed Senate Budget Committee Chairman Patty Murray (D-Wash.) and House Budget Committee Chairman Paul Ryan (R-Wis.) to negotiate a cease-fire. The resulting agreement would roll back sharp spending cuts known as the sequester over the next two years, sparing the Pentagon from more reductions and restoring billions of dollars for domestic programs.

The $62 billion cost would be more than covered by $85 billion in alternative policies, such as higher security fees for airline passengers, deeper cuts for Medicare providers and less generous retirement benefits for federal workers, including military retirees younger than 62.

The deal makes no effort to solve the nation’s biggest budget problem: a social safety net strained by an aging population. But it also would not raise taxes or reduce Medicare benefits, leaving each party’s core ideological commitments intact.

Last week, the deal sailed through the House and, on Wednesday, it easily passed the Senate, 64 to 36. Nine Republicans joined all 55 members of the Senate Democratic caucus in voting yes. Murray stood in the well of the chamber as the vote unfolded, accepting pats on the back from colleagues in both parties.

“The American people are sick and tired of the constant crises we’ve seen here in D.C. over the past few years,” Murray said on the Senate floor. “I am hopeful this deal can be a foundation for continued bipartisan work, because we have so many big challenges we need to tackle for the families and communities we represent.”

Afterward, senators voted overwhelmingly to end debate on a defense bill that sets Pentagon policy and military pay levels. A final vote to approve the National Defense Authorization Act was scheduled for Thursday, with hopes rising that the chamber also would approve several pending nominations and head home Friday.

Meanwhile, leaders of the congressional spending committees immediately began working on 2014 appropriations — the first in two years — to distribute about $45 billion in extra cash to federal agencies.

Senate Appropriations Committee Chairman Barbara A. Mikulski (D-Md.) was optimistic that she and her House counterpart, Harold Rogers (R-Ky.), could work through some minor disagreements and deliver an omnibus spending bill to Obama's desk by Jan. 15.

“I’m like a Raven: It’s the fourth quarter. There are seconds to go on the clock. And I’m ready to kick a 61-yard field goal,” said an exultant Mikulski, referring to Baltimore’s come-from-behind victory over the Detroit Lions on Monday Night Football.

Once that deadline is cleared, attention will turn to the national debt, which stands at $17.2 trillion. Enforcement of the debt limit has been suspended until Feb. 7, when Treasury Secretary Jack Lew has said he will have about a month before he starts running short of cash to pay the nation’s bills.

On Wednesday, White House press secretary Jay Carney said the president will not negotiate over the debt limit, sticking to the stance he adopted earlier this year. Although Republicans won $2.1 trillion in spending cuts — including the sequester — in exchange for raising the debt limit in 2011, they suspended enforcement of the debt limit twice this year without significant concessions.

“The president’s position is unchanged. He will not negotiate over Congress’s responsibility to pay the bills that Congress has racked up,” Carney told reporters, adding that administration officials do not expect Republicans “to travel down this road again.”

Republicans have devoted little thought to the debt limit, said senior aides and lawmakers. “There hasn’t been any discussion of it in any of the caucuses or committees that I’ve been on. And I don’t think it’s very clear what might happen,” said Sen. Charles E. Grassley (R-Iowa), who served with Ryan and Murray on the special panel tasked with forging the budget deal.

This weekend, Ryan said that the GOP will demand something in exchange for raising the debt limit, but that party leaders had not decided what.

“We don’t want ‘nothing’ out of this debt limit,” Ryan said on “Fox News Sunday.” “So we’re going to meet in our retreats after the holidays and discuss exactly what it is we’re going to try and get for this.”

This week, Senate Republican leaders echoed that view. “The plan is no clean debt ceiling,” said Sen. John Cornyn (Tex.), the No. 2 Republican in the Senate. “We’re going to fight for some control on spending, and I predict we’ll get it.”

But even some conservatives were skeptical that party leaders would risk another economy-rattling standoff that could alienate voters so close to a critical election — especially after they proved willing to weaken the sequester to avert another shutdown.

“I think they’ll raise the debt ceiling and they’ll punt and try to win the election [by running against] Obamacare. But they’re not going to do anything useful to head off the bankruptcy of the country,” Sen. Rand Paul (R-Ky.) said of GOP leaders.

“The consensus is we gave up on budgetary restraint with this budget deal. And it doesn’t leave me any hope that all of a sudden . . . we’re going to have a spine on the debt ceiling.”

Ed O’Keefe and Paul Kane contributed to this report.

Lori Montgomery covers U.S. economic policy and the federal budget, focusing on efforts to tame the national debt.
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