As the U.S. economy teetered on the brink of disaster a few weeks ago, apparently the pizza got the deal done. With the federal government shut down and the U.S. poised to surpass the debt limit in less than a day, congressional leadership staff wheeled in dozens of pizzas and, suddenly, sharply divided party lines melted away and a deal was reached.
The agreement contained three parts: It continued funding government operations at current levels through Jan. 15, 2014; increased the amount of debt that the government can carry, lasting until February 2014; and called for a “conference committee” of 29 House and Senate Budget Committee members to resolve differences between the fiscal 2014 House and Senate budget resolutions adopted earlier this year.
The two budget blueprints — respectively authored by opposing political parties — are starkly different when it comes to the size of government, level of taxation and how to address nearly $17 trillion in national debt. Most urgently in the short term, Republicans and Democrats are more than $90 billion apart on fiscal 2014 federal agency spending, which is what may return us to the recent showdown come January.
The likelihood of a repeat battle is high. None of the dynamics of the current stalemate are likely to change by early 2014. True, some lessons have been learned by some House and Senate Republicans, but probably not enough for a House-governing Republican majority to emerge.
Can the newly formed budget conference committee be successful? The odds aren’t great, but it can happen. If I were chairing the committee, I would insist on these ground rules:
1. Nothing is agreed to until everything is agreed to.
2. Everyone involved must present a plan, as opposed to simply tearing down someone else’s.
3. A conferee’s physical presence is required at meetings.
4. Staff is limited to the technical experts.
5. No grandstanding allowed.
6. Both House and Senate Budget Committee chairs agree to listen to and support each other whenever possible.
On the substance side, if I were chairing the committee, I would manage the process by:
1. Establishing goals for bottom-line numbers.
2. Establishing a calendar of activities due Dec. 1.
3. Assigning subconferences specific areas of focus, with deadlines to report back to the full conference.
The subconference groups should include revenue, automatic spending and annual spending. The revenue group should focus on finding revenue growth through tax reform. Senate Finance Chairman Max Baucus, D-Mont.. and House Ways and Means Chairman Dave Camp, R-Mich., should lead this effort and present the best options to the full conference.
The automatic spending group should tackle the issue of entitlement savings from federal programs that are growing on autopilot. The House budget resolution had about $900 billion in entitlement savings, although proposed savings from Obamacare will be off the table. The president’s budget had almost $500 billion, but the Senate resolution had only about $60 billion. This is where hard choices must be made.
The annual spending group has perhaps the biggest challenge: Can agreement be reached to turn off the sequester and turn back on the broken appropriations process? A set of five-year caps to overall spending, split between spending on domestic programs and national security programs, could be agreed on and given to appropriators to work out details with a deadline. Unfortunately, there is a huge difference between my small-government wing of the Republican Party and the anti-government tea party conservatives. As I see it, tea party members don’t feel compelled to “govern” or find solutions when they disagree with the opposing party. Their behavior suggests that they would rather just focus on the next election instead of trying to get something done for the good of the country.
Democrats have their own challenges. The amount of agency spending in the Republicans’ House budget resolution is the law under the Budget Control Act, and it assumes a second round of sequester cuts will occur in January under that same law. Democrats want to find a way to raise that number, but are unwilling to alter Obamacare or any of the other vast entitlement programs to affect the huge fiscal burdens they place on future generations.
These philosophical dynamics have created a situation where the country is lurching from crisis to crisis. This trajectory is unsustainable. We need a grand fiscal bargain and the budget conference committee is our best hope.
So my advice to the new committee is, start with the pizza. Sit down and get to know one another before starting the negotiations. Before digging in your heels and deciding that nothing can be accomplished, learn a little about each other and you’ll realize that you all love America and really do care about its future. You might find that you’re not as different as you think.
Jim Nussle is a former director of the White House Office of Management and Budget under President George W. Bush and former chairman of the House Budget Committee. He is founder of The Nussle Group in Washington, D.C.