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Mikulski Revives Budget Bargain Plan

Key US Senator Revives Push for Two-Year Sequester Fix

Nov. 6, 2013 - 06:30PM   |  
By JOHN T. BENNETT   |   Comments
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US Sen. Barbara Mikulski, D-Md., has proposed a temporary fix to sequestration that may have new life on Capitol Hill. (Getty Images)
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WASHINGTON — A prominent US senator is reviving her push for a temporary fix to sequestration, urging a special House-Senate budget panel to replace the next two years of planned cuts.

Senate Appropriations Committee Chairwoman Sen. Barbara Mikulski, D-Md., on Tuesday urged a House-Senate budget conference committee that must craft a set of long-term spending plans by Dec. 15 to resist addressing only the 2014 sequester cuts.

“My goals for the conference committee that is meeting are simple and straightforward,” Mikulski said on the Senate floor. “I would like to see the budget committee come up with not only a one-year framework but a two-year framework, giving a top-line funding level for 2014 and 2015 and replacing the sequester policy for at least two years.”

Mikulski first pitched what many on Capitol Hill call a “mini-bargain” in August, when it received a chilly reception from key Senate Republicans who experts say are the key to eventually passing the kind of sweeping fiscal deal needed to replace sequestration with other deficit-paring items.

“While I’m for a [long-term] bargain,” Mikulski said during a July 30 Senate Appropriations Defense subcommittee hearing, “I’m also for a bargain real quick.”

She said many House members “assume sequester is the new normal,” adding: “I don’t do that.”

The Appropriations Committee chairwoman has a big stake in addressing both the defense and domestic sequestration cuts.

One reason is because Maryland has a big military and defense industry presence; and another is her advocacy for domestic programs like those run by the National Institutes of Health, which is based in Bethesda.

“By saying ‘no’ to Draconian sequester cuts, we are investing in research and innovation that leads to cures and treatments leading to new products and jobs,” Mikulski said in a July 11 statement. “I will continue to stand sentry against the slash of reckless cuts to American biomedical research.”

GOP senators — who have been involved in on-again-off-again talks with the White House about a “grand bargain” that would span much longer than the Mikulski “mini bargain” — say her idea has merit.

But they long have insisted they prefer only a longer-term fiscal deal.

Sen. Lindsey Graham, R-S.C., told Defense News in August that “we have to go big.”

Sen. Bob Corker, R-Tenn., a key player in the fiscal talks with the White House said then that a mini-bargain never was discussed in those high-level talks.

“I think the gimmick period is over, and people are having serious discussions about how to go forward,” Corker said. “I don’t think a gimmick like that is going to be [feasible].

“I don’t say that with any lack of respect,” he added. “I’ve just been involved in a lot of meetings and discussions, and I don’t think that’s something that’s going to get a lot of traction.”

But the political climate has changed since then, including the creation of the budget conference. But experts are quick to note any recommendations it comes up with are non-binding — if they come up with any at all.

“When is the last time Congress has done anything substantive on the budget that far in advance of a deadline?” asked Stan Collender, a longtime federal budget analyst. “The conference committee has 29 members. When is the last time a congressional group that large has been able to come up with any kind of serious compromise on spending and taxes?”

Collender, in a recent post on his popular blog, laid out two likely outcomes for the House-Senate panel.

“The first is that the full conference committee will continue to meet and, like the anything-but-super-committee, come up with nothing,” Collender wrote. “The second is that a much smaller group — as in two people, neither of which may even be conference committee members — negotiates separately and then presents their plan to the committee for formal ratification approval.”

Mikulski disagrees with Collender’s assessment of the House-Senate panel.

“The budget conference is absolutely important to America’s future because it is about how much we should invest in America’s future: What should we do in terms of revenue?” she said Tuesday. “How do we close corporate loopholes and corporate welfare and also have them step up to their patriotic responsibility?”

Another change since August: The budget conference panel will deliver its recommendations one month before another government shutdown will loom and two before the next round of defense and domestic sequester cuts are slated to kick in.

Yet another: The 2014 mid-term elections will be several months closer — and American voters of all political persuasions, according to just about every major poll, are fed up with Washington’s dysfunction.

That means lawmakers could get antsy for a deal — any deal, including a mini-bargain — that pushes the next fiscal brawl way down the road.

Mikulski’s embrace of closing tax loopholes could give her mini-bargain push new life.

Senate Armed Services Committee Chairman Sen. Carl Levin, D-Mich., for months has been pushing the idea as a way to replace some sequester cuts.

Levin again on Tuesday told reporters that he wants to close some of the “most unjustified tax loopholes” like provisions in the Tax Code “where a corporation can deduct as an expense something that is different than it shows for the same item on its books.”

The veteran senator said any sequester-replacement scheme must spell out about “$100 billion a year” in other deficit-slashing measures.

“If you divided that in threes, say we want to get a third from revenue, a third from entitlements and a third from targeted spending cuts,” he told reporters. “That’s what a lot of people are talking about. That would mean you’d need about $33 million in revenues.”

Closing the aforementioned loophole would account for “two-thirds of the revenue [piece] for replacing sequestration,” Levin said. “That’s how big a deal it is.”

What would it take to secure a place in a “grand” or “mini” fiscal deal? Levin answered that on Tuesday: “What’s going to help most is if we can find a Republican who is willing to say, ‘As part of the replacement for sequestration they will support loophole-closing.”

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