published Saturday, July 2nd, 2011

Passing major debt deal by Aug. 2 seems doubtful

By ANDREW TAYLOR

Associated Press

WASHINGTON — It may be even more difficult than it appears for Congress to reach a broad deal to raise America’s borrowing limit and slash spending by Aug. 2. Maybe all but impossible.

Even if quarreling lawmakers can somehow agree this month, it is doubtful that Congress can write it up in binding fashion and pass it by one month from Saturday. That’s when, the Treasury Department declared anew on Friday, the government will start running short of money to pay the nation’s bills.

Congress could end up having to vote at least twice on the political poisonous issue of raising the debt ceiling, now $14.3 trillion, to avoid a first-ever government default. The first vote would be on an interim raise, possibly in the tens or even hundreds of billions of dollars, to give Congress time to wrap up a grand bargain allowing the government to go trillions of dollars deeper into debt in exchange for spending cuts and possibly higher taxes totaling an equal amount.

“It will take time, and that is a bit troublesome,” says Sen. Jon Kyl, R-Ariz., who represented Senate Republicans in budget talks led by Vice President Joe Biden. “Nobody wants this to be just parachuted in three days before they vote on it.”

Veterans of previous budget deals say there’s no way President Barack Obama and Congress can meet the Aug. 2 deadline even if a broad overall agreement is reached in the next two weeks. First, it could take weeks more for lawmakers and staff aides to implement that deal negotiated by the president and the two parties’ leaders.

Then, lawmakers would need time to examine and digest the legislation. And that’s hardly all.

“There’s the need to write it, the need to read it, the need to understand it, the need to score it, the need for it to be ‘real,’ the need for it to be processed and supported by each side’s base, the need to assemble the necessary votes,” said GOP lobbyist Eric Ueland, a former longtime Senate aide.

And that’s assuming everything goes according to plan — that the debt-budget pact doesn’t get blown up by a revolt from the tea party on the right or frustrated Democrats on the left. That’s a huge “if.”

It took many months to move a 2005 budget-cutting bill — which ended up cutting about $100 billion over 10 years — through the system, and that was when Republicans controlled both the White House and all the congressional committees that drew the legislation up.

Now, GOP-controlled House panels and Democratic-led Senate committees with little experience working together will have to write up an agreement hatched by Obama and the top leaders in both parties. Battles are unavoidable. The House and Senate Agriculture committees, for example, will be asked to implement farm subsidy cuts they either disagree with or would prefer to do in a more deliberate fashion later.

Even items that both sides agree on, such as lucrative auctions of electromagnetic spectrum to wireless companies, can be enormously complicated to implement. Core questions, like how much money to devote to building a new, more effective wireless system for emergency responders and how much to compensate broadcasters for giving up their existing rights to spectrum, seem much too complicated to resolve in a couple of weeks.

The degree of difficulty is heightened by the desire to generate a package of deficit cuts in the range of $2.4 trillion over the coming decade to balance a similar increase in the debt limit — one that’s large enough to keep the government afloat past the November 2012 election.

Discussions led by Biden focused on well over $1 trillion in savings, most from the pot of money assigned to Cabinet agency budgets passed each year by Congress. But the types of additional ideas that could get lawmakers to the $2 trillion-plus target, like cuts to Medicare providers or targeted tax increases, invite sparring from industry groups and their defenders on Capitol Hill. Another idea, a new government cost-of-living adjustment that would affect both Social Security benefits and tax brackets, is simpler to draft but may be too big a lift politically.

So what are the chances of threading the needle and getting a $2.4 trillion debt pact passed by Aug. 2?

“You can’t,” says Bill Hoagland, a former Senate GOP veteran of budget deals dating back to the Reagan administration. “All I can think here is that if you had an agreement in principle, that then you would have an agreement to vote on a temporary increase in the statutory debt limit while the details are worked out and the legislative language is put together.”

Any legislation cutting so much — including farm subsidies, federal health care programs and federal retirement benefits — is going to be hard for many lawmakers to digest. And with the vote likely to be on a knife’s edge in both the House and Senate, the leverage of individual lawmakers to protect parochial interests is magnified.

The 2005 debate, for example, featured numerous power plays, such as a move by Sen. Norm Coleman, R-Minn., to jettison cuts to sugar subsidies and a last-minute push by Ohio Republicans to reverse Medicaid cuts that would have hit Buckeye state manufacturers of oxygen equipment.

There’s another consideration. Should Congress employ special budget procedures that would allow it to pass the debt limit bill with a simple majority in the Senate or should it move more quickly but have the measure, already unpopular, be subject to a filibuster requiring 60 votes to overcome?

Avoiding a filibuster would require both the House and Senate to first pass a blueprint of the deal in the form of a resolution setting savings targets for various committees to deliver within a set time. Then the two chambers would have to pass the deal itself in the form of binding legislation. Importantly, Senate debate could feature votes on dozens of amendments — including “poison pills” offered by both sides for political gain.

Using this filibuster-proof but time-consuming procedure means Congress would definitely bust the Aug. 2 deadline. But the alternative means gathering 60 votes in the polarized Senate, also difficult.

For veterans of the process like former GOP aide Ueland, the puzzle doesn’t fit together — at least by the close of the current Aug. 2 window.

“The system will only produce what the system can produce,” Ueland said. “And it’s not $2.4 trillion.”

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