Deal poses problems for all sides

By BRIAN FRIEL, Congress.org

April 11 2011


The fiscal 2011 spending deal is done. Or is it?

House and Senate leaders still have to persuade rank-and-file lawmakers to clear the agreement, and some will almost certainly find it difficult to swallow.

The agreement reached late April 8 embodies a series of trade-offs that exacted deep domestic spending cuts opposed by Democrats and excluded many policy changes sought by Republicans.

The deal covers more than a trillion dollars in federal programs and a raft of policy issues, so everyone will find something to dislike.

House Republican Conference Chairman Jeb Hensarling, R-Texas, applauded Speaker John A. Boehner, R-Ohio, for negotiating historic spending cuts, but said they amounted to “rounding errors,” in an appearance on CNN’s “State of the Union.” On the other side, the top Budget Committee Democrat Chris Van Hollen, D-Md., appearing on ABC’s “This Week,” expressed doubt the deal would pass.

Facing such challenges, it’s no surprise that both President Obama and Boehner sought to look beyond this week’s votes to even bigger budgetary battles ahead in urging lawmakers to vote for the spending deal. “This battle is just beginning,” said Sen. Jeff Sessions, R-Ala., comparing the new dynamic to the fiscal and policy battles that dominated divided government in the mid-1990s.

This year’s plan was unresolved until an hour and a half before the government was scheduled to begin shutting down. Overall, the package includes $37.7 billion in cuts from previous spending levels, lawmakers and aides said.

Of that amount, $1.1 billion would come from an across-the-board cut spread across discretionary programs with the exception of Pentagon programs. The Defense Department is funded at $513 billion, about $2 billion less than Republicans had proposed. Democrats pushed for deeper cuts, but Republicans drew the line at that figure, an increase over last year’s levels.

Roughly $20 billion of the deal’s cuts come from domestic discretionary programs. Obama accepted about $1.5 billion in cuts to one of his signature efforts, a high-speed rail grant program, but Democrats staved off $1.2 billion in proposed cuts to federal employees’ bonuses and pay beyond a salary freeze that the White House announced previously.

Awaiting full details of the deal, Senate Appropriations Committee member Barbara A. Mikulski, D-Md., said expected cuts to education and health care programs “will have a significant negative consequence.”

White House Communications Director Dan Pfeiffer said April 9 the cuts included $13 billion from the Labor, Education and Health and Human Services departments, as well as $8 billion from foreign affairs programs. Pfeiffer noted small cuts such as $35 million from a crop insurance rebate program and $30 million from a job training program for student loan processors.

But negotiators safeguarded funding for current enrollment levels in Head Start and current levels to maintain maximum awards for needy college students through Pell grants, Pfeiffer said. The National Institutes of Health was spared a $500 million cut to biomedical research, but a planned doubling of funding for research and development at the National Science Foundation and other agencies was scaled back.

To limit the effect of cuts on such social safety-net programs, Democrats pressed for cuts to mandatory spending programs that typically are walled off from the annual appropriations process. A larger-than-expected $17.8 billion comes from such programs.

To increase the top-line spending cuts to a level Boehner could accept, Democratic negotiators in the final hours agreed to more cuts as long as they came from mandatory accounts. It was a cut of $2.5 billion in transportation project funding that got negotiators to the finish line, a Senate Democratic leadership aide said.

House Appropriations Chairman Harold Rogers, R-Ky., wanted to limit mandatory spending cuts to about double the $8.7 billion included in the fiscal 2011 legislation (HR 1) the House passed Feb. 19.

The battle over the mix of spending cuts consumed Republican and Democratic negotiators. Democrats originally pushed for tightening tax breaks, particularly those benefiting the oil and gas industry, but Republicans rebuffed them. The final deal includes 53 percent discretionary and 47 percent mandatory spending cuts, a split that tracks with Democrats’ hopes.

The spending fight was upstaged by a struggle over 65 provisions Republicans wanted to alter, and in some cases end, federal programs. Democrats fought nearly all of the so-called riders and mostly prevailed — a result Boehner will have to help his rebellious freshmen accept.

The package includes no limits on the EPA’s regulatory powers, even though Republicans pressed to stop various restrictions on greenhouse gas emissions and mountaintop mining, among others.

Holding a series of votes on April 6 in which similar restrictions failed to muster even a simple majority in the Senate, Majority Leader Harry Reid, D-Nev., dealt a death blow to the requested EPA riders. The fight, though, is far from over with Republicans vowing to continue to try to curtail the agency’s regulations on businesses — an effort Democrats will continue to resist.

Republicans were forced to concede their efforts to block funding for Planned Parenthood and the implementation of the 2010 health care overhaul law (PL 111-148, PL 111-152). After intense wrangling, Boehner agreed to exclude those provisions from the final bill in exchange for separate Senate votes on each issue.

The test votes will require a 60-vote threshold, virtually guaranteeing that current funding for implementation of the health care overhaul law and Planned Parenthood will continue, a congressional aide said April 9.

Reid and Obama refused to compromise on Planned Parenthood, and the standoff was a central reason negotiators concluded their work literally in the eleventh hour. The final deal did yield to Republicans on a prohibition on either federal or local funding of abortions in the District of Columbia — reversing a change made in the last Congress that had removed the restriction on local funding.

The fight essentially was a draw, reverting to longstanding federal policy on matters related to the hot-button issue.

On health care, Democrats gave Republicans a fig leaf: funding for various studies on the potential problems in implementing the overhaul. Republicans want ammunition to fight the law, with a study of the effects of the law’s mandates, its impact on insurance premiums, a review of waivers to various organizations from its rules and an examination of research comparing the effectiveness of different types of treatments that is funded in both the law and the 2009 economic stimulus measure (PL 111-5).

House Republicans are just beginning to rev up attacks on last year’s rewrite of financial services (PL 111-203) passed largely with Democratic votes. Though Republicans sought to restrict the power of the law’s Consumer Financial Protection Bureau, the spending deal directs the Government Accountability Office to study the bureau’s operations. As that law takes effect, look for Congress to try anew to resist financial oversight.

On education, the spending deal revives a private school voucher program for District of Columbia students, a signature Boehner goal. That concession by Obama — who had sought to phase out the voucher program — could sour relations between the White House and teachers’ unions already wary of Obama’s embrace of changes to teacher pay and his priority education program to boost college graduation levels know as Race to the Top. His program was largely protected in the deal.

Among other controversial issues addressed in the funding deal likely to meet vigorous resistance in Congress this week:

• A ban on funding to hire more IRS agents to crack down on tax cheats and up revenue. House Republicans succeeded in their attempt to block funding for the administration’s initiative.

• An end to spending for NPR and other public broadcasting services. Republicans lost their effort to block the funding.

• An elimination of funding for a pilot “voucher” program allowing some people to turn down employer-sponsored health insurance in favor of coverage through health insurance exchanges created by the health overhaul. Wyden lambasted the deal for zeroing out funding for the program.

• A curb on funding to put in place regulations dealing with the Federal Communications Commission’s “net neutrality” rules for broadband service providers. Democrats blocked the House Republicans’ proposed restrictions.

• A ban on funding for Education Department rules affecting private for-profit colleges. Republicans wanted to block it, but Democrats won out.

• A bar on funding for a U.N. population program and international family planning. Democrats successfully deflected the Republican drive to zero out the funding.

• A bar on funding to transfer prisoners being held in the Guantánamo Bay detention facility to U.S. facilities for trials in U.S. courts. Republicans got to retain the provision that Democrats deemed “moot” after the Obama administration announced recently it would try detainees in military tribunals at the Cuba facility.

Link: http://www.congress.org/news/2011/04/11/deal_poses_problems_for_all_sides/