WASHINGTON – Congress declared a holiday truce in the budget wars Wednesday, sending President Barack Obama a blueprint for funding the government through 2015. But the next skirmish was already on the horizon: an election-year fight over the national debt.
The budget deal that passed the Senate on Wednesday amounts to a handshake agreement to avoid a government shutdown when a temporary funding measure expires Jan. 15. However, the accord does not address the need to raise the debt limit once again, setting up a potentially complicated confrontation in late February or early March.
That fight would come just months before midterm congressional elections. The GOP is deeply divided over tactics to deal with the debt, a core issue for the Republican base. Some conservatives are calling for another showdown, insisting on an additional round of spending cuts in exchange for granting the Treasury Department more borrowing authority to pay the nation’s bills.
But GOP leaders, especially in the House of Representatives, have no appetite for another Washington fiscal crisis that could destroy their popularity among voters, aides said. Instead, they are hoping for a more peaceful resolution modeled on the latest budget deal — a bipartisan compromise that solves small problems and aims to offend almost no one.
“Republicans kind of look at this election as probably the best opportunity we’ve ever had at taking control” of the Senate, said Sen. James Inhofe, an Oklahoma Republican. As a political message, threatening to default on the debt “hasn’t really worked all that successfully in the past,” he said.
As they rushed to finish work and leave town for a three-week Christmas break, senators were more inclined to bask in the glow of the budget deal than to plot strategy for the debt limit. The agreement draws to a close nearly three years of fighting over agency budgets — battles that repeatedly risked shutting down the government and actually did close parks, museums and federal offices for 16 days in October.
Congressional leaders appointed Senate Budget Committee Chairwoman Patty Murray, a Democrat, and House Budget Committee Chairman Paul Ryan, a Republican, to negotiate a cease-fire.
The resulting agreement would roll back sharp spending cuts known as the sequester over the next two years, sparing the Pentagon from more reductions and restoring billions of dollars for domestic programs.
The $62 billion cost would be more than covered by $85 billion in alternative policies, such as higher security fees for airline passengers, deeper cuts for Medicare providers and less generous retirement benefits for federal workers, including military retirees younger than 62.
The deal makes no effort to solve the nation’s biggest budget problem: a social safety net strained by an aging population. But it also would not raise taxes or reduce Medicare benefits, leaving each party’s core ideological commitments intact.
Leaders of the congressional spending committees immediately began working on 2014 appropriations — the first in two years — to distribute about $45 billion in extra cash to federal agencies and deliver an omnibus spending bill to Obama’s desk by Jan. 15.
Once that deadline is cleared, attention will turn to the national debt, which stands at $17.2 trillion. Enforcement of the debt limit has been suspended until Feb. 7, when Treasury Secretary Jack Lew has said he will have about a month before he starts running short of cash to pay the nation’s bills.
On Wednesday, White House press secretary Jay Carney said Obama won’t negotiate over the limit, sticking to the stance he adopted earlier this year. Although Republicans won $2.1 trillion in spending cuts — including the sequester — in exchange for raising the debt limit in 2011, they suspended enforcement of the debt limit twice this year without significant concessions.
Republicans have devoted little thought recently to the debt limit, said senior aides and lawmakers. This weekend, Ryan said that the GOP will demand something in exchange for raising the debt limit, but that party leaders had not decided what.