It’s not a perfect deal for the White House — but it’s a worse deal for Republicans.
Democrats won’t say it too loudly just yet, but the emerging budget agreement leaves Republicans with remarkably little to show for forcing the first government shutdown in 17 years: They barely nicked Obamacare and their poll numbers are in tank.
President Barack Obama would get most of what he wanted. He had insisted that Congress reopen the government and extend the country’s borrowing authority without any ideological strings attached. He held the line on the debt ceiling and Democrats are set to hold off Republican attempts to lock in next year’s round of sequester budget cuts early.
But it’s not the squeaky clean bill Obama sought.
There would be minor changes to the president’s signature health care law. The White House and Democratic leaders will argue the Obamacare provisions were a one-for-one proposition — each party got a fix to the Affordable Care Act — and did not come as the price for raising the debt limit or restarting the government, according to Democratic officials involved in the talks.
The Obamacare provisions risk muddying the president’s message, but the changes are so negligible that even House Republicans are grumbling that it’s a clean debt limit increase.
Even if the potential Senate deal survives in the House — still very much an open question — Obama would soon be back fighting the next round with Republicans. The debt limit increase would last almost four months. It’s less than what Senate Majority Leader Harry Reid (D-Nev.) wanted, but longer than what House Speaker John Boehner (R-Ohio) suggested. And the next debt limit hike wouldn’t be contingent upon a budget deal, as Boehner proposed.Above all, Democratic leaders thinks the potential deal allows them to make progress on their overarching goal: Convincing Republicans that Democrats won’t cave to debt limit demands.
The negotiations continued Monday night, and no formal announcement is expected until after Reid and Senate Minority Leader Mitch McConnell (R-Ky.) meet separately with their caucuses Tuesday. New sticking points could emerge, as they did late Monday, but both leaders closed the day by saying they were optimistic.
“We’re doing our best to make everybody happy but everyone knows we’re not going to be able to do that,” Reid said. “So everybody understand we’re doing the very best we can with all the frailties that we have as people and legislators.”The proposal would fund the government until Jan. 15 and extend the debt limit until Feb. 7. The plan under consideration would also require larger bicameral budget negotiations to conclude by Dec. 13.
Republicans would secure a provision to force Health and Human Services Secretary Kathleen Sebelius to certify that individuals receiving Obamacare subsidies meet the required income levels. The department’s inspector general would later have to conduct an audit on the matter. This is a comedown from the delay in the medical device tax that Republicans had wanted after they had previously abandoned efforts to repeal the law, defund it and delay the individual mandate.
Democrats would win a labor union priority to delay for one year an Obamacare reinsurance tax, which was supposed to be levied against most insurance plans to help spread the risk for insurers who take on the sickest patients next year. Delaying the fee — $63 per person covered by an insurance plan per year — could amount to a significant boon to unions.
The emerging deal would face a tough road in the House, where Boehner’s leadership team, allies and rank-and-file lawmakers spent Monday saying that Reid and McConnell were crafting a crummy framework.
The talk among House Republicans in the cloakroom and on the floor was that they would be asked to accept a clean debt limit and government funding bill — in short, the concessions won by McConnell were nothing to crow about. One House Republican said they would be lucky to find 20 GOP lawmakers willing to vote for this proposal.
McConnell, however, is preparing to make a pitch to his conference that Republicans would get plenty out of the deal.
They kept Obama from winning his “clean” debt limit increase by extracting an Obamacare concession. They rebuffed Democratic demands for a year-long debt limit extension. Republicans also secured sequester spending levels through Jan. 15 — two months longer than Democrats first proposed, although shorter than what Sen. Susan Collins (R-Maine) had wanted as a way to lock in next year’s even-deeper spending cuts under the 2011 Budget Control Act.
“Total federal spending has now gone down for two years in a row — the first time that’s happened since the Korean War,” McConnell said. “As a result of the BCA: federal spending will be lower next year than this year. It is, without question, the most significant spending reduction in modern history and Senate Republicans will not accept anything that that undoes these cuts.”
But Democrats think the House-Senate budget negotiations mandated under the deal would give them a decent shot at renegotiating the sequester. And they’re hoping that Republicans will be motivated to avert next year’s cuts, which disproportionately hit defense spending.
Democratic officials are also pointing to the fact that the fiscal deadlines remain staggered, with the government funding coming due before the next debt limit increase. Democrats are betting that Republicans won’t try to close the government again.
“The first stumbling block is the shutdown,” said a senior Senate Democratic aide. “It’s the moat in front of the debt limit.”
Democrats are hoping the potential deal sends a signal to Republicans that they can no longer use the debt limit as a weapon.
Obama has refused to negotiate around the debt limit since he agreed to do so in 2011, when his attempt to strike a grand bargain with Boehner fell short.
House Republicans backed away from a fight in January when they agreed to raise the debt limit without demanding an equal amount of spending cuts, as they had done for years. Instead, they required that lawmakers in both chambers approve a budget resolution.
“We sincerely believe that, by this point, this is two clean increases and the wisdom on their side has gelled that this wasn’t a good thing for them,” the senior Senate Democratic aide said. “We will be resetting the precedent for what the debt ceiling is used for in the political realm.”
But Reid still has some convincing do among his rank-and-file that Democrats aren’t further enabling Republicans.
“I want to see the government reopened, I want to see the debt ceiling raised for a long period of time and I also don’t think we can send a message that every time you want a change in the law you shout, ‘I’m going to shut the government down,’” said Sen. Sherrod Brown (D-Ohio). “I don’t want to give any incentives … that they may play this game again. That they can scream, ‘We’ll shut the government down, we’ll default.’”
Politico
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