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Policy: Budgets & Deficits

As budget talks begin, hopes for grand bargain fade

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Politics,Congress,Susan Ferrechio,Obamacare,Paul Ryan,Senate,House of Representatives,Debt Ceiling,Medicare and Medicaid,David M. Drucker,Entitlements,PennAve,Economy,Budgets and Deficits

A little more than six months ago, Congressional lawmakers were talking about striking a "grand bargain" that would resolve the differences Republicans and Democrats have on spending, taxes and entitlement reform.

But now that formal budget talks are finally set to begin Wednesday, those lofty goals have been shelved. Lawmakers said they expect to spend much of their time bargaining over whether to maintain $1 trillion in spending cuts signed into law in 2011.

"We're not going to get a grand bargain," House Budget Committee Chairman Paul Ryan,R-Wis., told the Washington Examiner.

Ryan, the party's vice presidential nominee in 2012, is the top House negotiator in the budget conference, which is made up of Democrats and Republicans in both the House and Senate.

A grand bargain, Ryan said, would have to impose changes Medicare and Social Security, balance the budget and reduce the nation's debt and deficit -- a monumental task for a Republican-run House and Democratic Senate.

"It's not in cards with divided government and this administration," Ryan said.

The pessimistic outlook for a comprehensive deal is about the only thing both parties agree on.

"There is not going to be a grand bargain," Senate Majority Leader Harry Reid, D-Nev., said in a recent Nevada Public Radio interview, dismissing such a suggestion as "happy talk."

Lawmakers have until Jan. 15 to strike a deal on a budget that would keep the government open and running in 2014 and that tight deadline is the main reason so many lawmakers are ruling out a grand bargain.

A grand bargain is also far less likely because Democrats feel emboldened after voters largely blamed Republicans for a 16-day government shutdown, pushing the GOP's approval ratings to record lows. Democrats are suddenly far less willing to make concessions like cuts in Social Security or Medicaid that Republicans say are needed to balance the budget.

Where does that leave the budget talks that start Wednesday?

Lawmakers will be narrowly focused on the annual budget reductions mandated by the 2011 Budget Control Act that was itself the product of the White House's and congressional Republicans' failure to resolve an earlier budget standoff.

A new round of cuts, totaling $109 billion, will take effect in mid-January unless Congress changes the law. Both parties believe the across-the-board reductions known as the sequester have been damaging, particularly to the military.

Republicans want to keep the cuts, which would cap spending at $986 billion, but shuffle them around to spare important programs. Democrats want to restore the funding entirely and make up for the $1.05 trillion tab by raising taxes.

Reid said Tuesday that he won't consider any deal on the sequester cuts unless it includes a plan to raise revenue.

Republicans told the Examiner they'd consider restoring sequester cuts only if Democrats agree to entitlement reforms.

"We shouldn't have any trouble holding the sequester cuts because they were the idea of the White House," Sen. Chuck Grassley, R-Iowa, a member of the budget conference, said.

Grassley said that while the public blamed the GOP for the government shutdown, voters would support Republican efforts to retain sequester cuts that restrain spending.

"This is on dollars and sense, the other fight was about Obamacare," Grassley said.

Several political observers said Republicans will have no choice but to give up some of the cuts, particularly if they must do so to avoid another government closure by Jan. 15.

"There won't be another government shutdown," Senate Minority Leader Mitch McConnell, R-Ky., recently said on CBS. "You can count on that."

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Author:

Susan Ferrechio

Chief Congressional Correspondent
The Washington Examiner
Author:

David M. Drucker

Senior Congressional Correspondent
The Washington Examiner