House Speaker John A. Boehner (R-Ohio) promised to “clean the barn” before stepping down this week. And it seems the stables will soon be hosed down. With the announcement of a two-year budget deal negotiated by the White House and top congressional leaders, Congress is poised to lift the debt ceiling and ease fiscal constraints on both defense and domestic spending. Assuming the deal is enacted into law this week, the agreement significantly lessens the immediate challenges facing Rep. Paul Ryan (R-Wis.) when he is (presumably) elected speaker on Thursday.
Here are four takeaways from the bipartisan deal.
1. We’ve seen this movie before: a deal with no long-range plan
As others have noted, the structure of the deal strongly resembles the fiscal accord that Ryan and Sen. Patty Murray (D-Wash.) cobbled in December 2013. That deal eased spending limits by roughly $60 billion for two years in exchange for cuts to mandatory spending and new fees.
This week’s agreement again lifts caps for two years, but it allows for a significantly higher increase in discretionary spending. Once again, new spending would be offset by changes to entitlement programs and new revenue.
No surprise that congressional party leaders came back to the same script. Leaders in both parties are motivated to find ways of boosting spending (Democrats favoring increased domestic spending; most Republicans, defense).
But neither party seems inclined to support a longer-term grand bargain that would require rewriting the script to find much greater savings or revenue. Why legislate for the long term if your party believes control of the White House and Congress remain in reach? Instead, kicking the can down the road for the next president and Congress allows each party to secure some spending relief now by imposing relatively little pain.
2. We’re likely to see this movie again
By crafting a two-year deal, the underlying structure of the budget act remains in place: tough caps on discretionary spending coupled with threats of automated cuts to entitlements to enforce the caps. Moreover, the now familiar pattern partially pays for increased short-term spending by extending the budget act’s mandatory sequesters into the future.
The budget law originally ended threatened sequesters in fiscal 2021, but were extended through 2014 to fund the Ryan-Murray deal. If this week’s deal is enacted, that automatic sequester (falling mostly on future Medicare spending) would be extended through fiscal 2025. Congress created a straightjacket that it can loosen, but seems unable or unwilling to escape.
3. Bipartisan deals are possible, even with extreme polarization
As Frances Lee and I explored recently, political deals are possible in the absence of any natural sweet spot between the parties. What matters –possibly more — is how the parties judge the costs of refusing to negotiate.
Democrats — holding the White House and seeking increased domestic spending — had no incentive to avoid bargaining. For the Republicans, Senate Majority Leader Mitch McConnell (R-Ky.) made clear after the 2014 elections that default and shut down were off the table. With many GOP senators seeking reelection in blue and purple states, costs to the GOP brand were too steep to risk blame for failing to make a deal.
Most observers have suggested that Boehner was motivated to clean the barn to ease the challenges faced by the incoming speaker. Perhaps, but Boehner’s reputation is surely burnished by leaving the Congress on a significant high note.
4. Ryan is right. The process stinks.
The presumptive next speaker may be correct about the process used to reach the deal: “I think the process stinks.” But deals that “enlarge the pie” (requiring each party to give the other its top priority, as opposed to dividing the pie) are hard to negotiate in public. As the White House spokesperson noted late Monday before the deal was announced, “Not everything has been agreed to [and] that means nothing has been agreed to.” Those sorts of deals — like the Ryan-Murray deal — require that doors be closed to knit the package together.
Of course, Ryan panned more than the secrecy. As someone who just secured the support of the Freedom Caucus for his speakership by promising to make the House more “bottom-up,” he had no choice but to condemn a deal negotiated top-down by party leaders and staff. (That said, staff of the House Ways and Means Committee, which Ryan is chairman of, reportedly generated one of the key provisions addressing Social Security disability reform, so it can be hard to judge top from bottom.)
FYI: There are still hurdles to clear
Congress still has to pass measures that suspend the debt limit and set the deal into law. It also must pass the actual appropriations bills that implement the higher spending caps. The first two are likely to occur this week on Boehner’s watch. The third comes later this fall, perhaps as the last train leaving the station for the year. With increased defense spending, it shouldn’t be too heavy a lift to secure significant GOP support.
Regardless, Ryan’s ability to build a majority for an omnibus package and to prevent any rear guard effort to derail it will serve as an early test of his young speakership.