Congressional leaders and the White House are nearing a deal on a two-year budget agreement that would increase military and domestic spending in exchange for long-term spending cuts to programs like Social Security and Medicare.
The legislation would also likely be paired with an increase in the federal borrowing limit through March 2017, preventing a potentially disastrous default next week. The time frames laid out in the potential deal would also effectively ensure the end to the near constant budget and debt limit fights that have dominated President Obama’s relationship with congressional Republicans in recent years by pushing of the next set of fiscal deadlines into 2017.
Several congressional aides, however, said the final details are not complete and that the outlines of the tentative agreement are still being presented to rank-and-file members to gauge their support.
House sources were hopeful that a bill could be filed as early as Monday night. The budget deal is expected to include equal increases in both domestic and military spending and would prevent a premium increase for Medicare Part B recipients from going into effect, according to aides.
White House Spokesman Josh Earnest told reporters on Monday that the deal is not final.
“Not everything has been agreed to,” he said. “That means that nothing at this point has been agreed to.”
Leaders are expected to present details of the deal to members over the coming days, setting up a very tight time frame to build support for the plan before Congress will be required to vote on debt limit increase, which the Treasury Department says needs to occur by Nov. 3.
The timing would also make the deal one of the very last items negotiated by House Speaker John Boehner (R-Ohio) before he steps down at the end of the week.
If the deal cannot be completed in the next few days, however, it would leave House Ways and Means Committee Chairman Paul Ryan (R-Wisc.) to complete negotiations if, as expected, he is elected to replace Boehner as speaker — a development that would put Ryan in a very difficult political position.
For this reason, Boehner is under intense pressure to secure a deal before he leaves to help smooth the waters for the start of Ryan’s tenure. But even if Boehner is able to convince the fractious House Republican conference to get on board with plan it is unclear whether the Senate will embrace the legislative package.
Boehner is taking the lead on the negotiations with the White House while Senate leaders in recent weeks have been hesitant to endorse any proposals on either the debt limit or the budget. Majority Leader Mitch McConnell (R-Ky.) has repeatedly said that he will wait to see what the House can pass before embracing any plans.
McConnell is also one of just a few lawmakers who has backed the deep spending cuts included in the sequester. He said earlier this year that the Budget Control Act “actually did a pretty good job” of reducing government spending and he is reluctant to negotiate any spending increases.
“As the details come in and especially if an agreement is reached, I intend to consult and discuss the details with our colleagues,” McConnell said on the Senate floor Monday.
The final amount of the spending increases has not been finalized, nor have the spending offsets and aides warned the deal could change substantially depending on how members respond. The proposal being negotiated would set the top-line spending numbers and give the House and Senate Appropriations Committees until Dec. 11 to decide how it should be parceled out among federal agencies and programs.
There is no guarantee that the spending cuts will be sufficient to convince wary Republicans to vote for the spending bill and an increase in the borrowing limit ahead of the upcoming Nov. 3 deadline. Many conservatives have said they will not vote for any debt limit increase without corresponding spending cuts, a proposal that has been a non-starter for the White House.
Aides said the deal also would likely include new rules for the Social Security Disability Insurance fund, which is expected to run out of funds by the end of 2016. Discussions have also included maintaining a 2 percent cut to Medicare provider payments that were included in the 2011 Budget Control Act, also known as the sequester. Those cuts could be problematic for Democrats who have insisted that there be no changes to Medicare or Social Security in a budget deal.
The deal under discussion would extend the life of the disability fund for as many as six years and would include programmatic changes, such as allowing some recipients who can still work to take partial payments while earning outside income. The plan would avoid across-the-board disability insurance cuts by implementing smaller changes like expanding a program requiring a second medical expert to weigh in on whether or not an applicant is truly disabled.
A pilot version of that program has been in effect in several states and has been shown to reduce the number of applicants approved, lowering the cost of the program. Other savings would come from so-called “good governance” changes that are intended weed out waste and fraud.