Rep. Paul Ryan listens to Sen. Patty Murray during a budget conference Nov. 13. (Getty Images)
WASHINGTON — A US House-Senate budget committee is close to finalizing a plan on federal spending for the next two years that would provide the Pentagon and other federal agencies some relief from automatic spending cuts known as sequestration.
Defense and congressional sources late Wednesday afternoon told Defense News that a budget conference committee led by House Budget Committee Chairman Rep. Paul Ryan, R-Wis., and Senate Budget Committee Chairwoman Sen. Patty Murray, D-Wash., was getting close.
But the duo had yet to shake on a final deal. If some final sticking points can be ironed out, they could announce the spending and deficit reduction deal later this week or early next week, sources said.
“Ryan and Murray are working toward a discretionary spending agreement that would have a topline of between $1.01 trillion-$1.02 trillion over the next two years,” one defense industry lobbyist said of the budget deal. “This is the smallest of the small deals, but it’s something.
“Taxes and entitlements are off the table, so they had to find cuts elsewhere and came up with $85 billion of cuts and revenues, drawing a distinction between revenues and taxes,” the defense industry lobbyist said. “Twenty billion of the $85 billion would go to deficit reduction to keep Republicans happy, and the rest would go for partial sequester relief government-wide over the coming two years, half to the Pentagon, so about $15 billion a year in relief, depending the final deal.”
Another defense source with knowledge of the deal cited similar figures.
Spending caps imposed by the 2011 Budget Control Act would stay the same, as would sequestration, but they would be offset over the coming two years by savings and revenue increases like higher TSA fees on airline tickets and five-day mail delivery that would save $10 billion over two years.
Sources said that Senate Minority Leader Sen. Mitch McConnell, R-Ky., opposes the deal.
If the budget resolution passes both chambers, “we won’t have a [continuing resolution], which is the most devastating for the Pentagon,” the lobbyist said, adding it would mean “appropriations bills for two years that give us stability and some sequester relief.
The parameters of the deal, as explained by sources, is similar in construct to the kind of “mini-bargain” floated for months by the Senate Budget Committee chairwoman, Sen. Barbara Mikulski, D-Md., who argued that a long-term plan could not be reached in the current toxic political environment.
Sources have told Defense News that the House-Senate conference committee’s nitty-gritty work has mostly been done by Ryan and Murray.
“Murray and Ryan are doing most of the talking, and then they’re kind of just getting back to the rest of us,” said one aide of a member of the conference committee.
It became increasingly clear that the Ryan-Murray committee would be unable to agree to the kind of long-term budget and deficit-paring blueprint it was charged with creating. That’s because Republicans and Democrats still do not agree on how best to pare the massive federal deficit.
GOP members are willing to replace the mechanism of sequestration, but only if they get big entitlement reforms and more federal spending cuts as a replacement deficit-cutting tactic. Democrats want to get rid of sequestration, but with tax revenues, some “targeted” cuts – but much less cut from entitlements.