Congress today begins its last week in session before the Christmas recess. Among the top items on its agenda: the federal budget.
Funding for the government expires in mid January and a second round of sequester cuts is looming, which beg the question: Will we have another government shutdown, like we did in October, which lasted for 16 days? And could the government default on any debt payments--which was also a worry, though not a reality, during the October budget battle?
The Daily Ticker's Aaron Task posed those questions to some of the panelists at a Hamilton Project conference on Supporting America's Lower-Middle-Class Families, last week. They all agreed there will be a budget deal, albeit a minor one, so no shutdown and no debt default.
"I think there will be agreement," said Roger Altman, executive chairman of Evercore Partners and a former deputy secretary of the U.S. Treasury. "There will be some package which alleviates the impact of the sequester, substitutes other cuts ... but it will be small stuff." He added, "There may be noise about another shutdown or a default ... [but] we've moved past that."
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Indeed, the bipartisan conference committee that emerged from the last budget battle resolution has reportedly reached a tentative budget deal. Its co-chairs House Budget Committee Chairman Paul Ryan (R-WI) and Senate Budget Committee Chairwoman Patty Murray (D-WA) are expected to finalize a deal before the committee's own deadline: Friday, December 13.
One reason a deal is likely: a new playbook for the Republicans. Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute, told Aaron, "I don't think there are many Republicans that feel like the way they played this last time worked really well for them. One would expect that they would be more aggressive trying to get this thing behind them."
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Jason Furman, chairman of the president's Council of Economic Advisers, offered no predictions about a budget deal but agreed that Republicans should "be able to work together to find a constructive way forward."
It won't be the grand bargain that many on the Hill and elsewhere have been hoping for, but it's something.
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"It will raise the discretionary cap for 2014 a bit and then offset it," said Peter Orszag, former director of the Congressional Budget Office and White House Budget Office, now Vice Chairman of Corporate and Investment Banking at Citigroup. "That's great but there's no grand bargain.... Meanwhile ... the deficit has been coming way down and health care costs especially Medicare have slowed way down, and so the medium and long-term fiscal picture has been improving fairly significantly while no one was paying attention."
One possible stumbling block to a deal: unemployment benefits. Democrats want to extend benefits beyond the usual 26 weeks, with an additional 28 extra weeks, but Republicans oppose that. Rep. Rand Paul (R-WI) told Fox News Sunday an extension would be "a disservice" to workers because businesses are reluctant to hire long-term unemployed workers. Senate Majority Whip Dick Durbin (D-IL) told ABC's This Week that he favors an but suggested its omission would not be a deal breaker.
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