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Grand bargains are out. Tax hikes are out. Short-term and stopgap solutions are very much in.
That’s the reality in Washington this week, as budget conferees meet for the first time Wednesday to try to hammer out a deal.
Publicly, the White House and top Democrats are still talking about a “balanced” plan requiring new revenue as part of a long-term budget blueprint that would replace the sequester and tackle the nation’s long-term debt challenges.
But almost no one expects that to happen.
Last week, the Nevada Democrat and the Wisconsin Republican lowered expectations by ditching the grand bargain talk. Ryan told reporters that tax hikes aren’t going to be in the deal; Reid cited the GOP’s opposition to more tax hikes on the wealthy as a reason people should stop talking about cutting Social Security or Medicaid.
The focus instead will be on forging a deal that can replace some of the sequester spending cuts — perhaps for just a year or two — and un-sticking the mess that has become the annual appropriations process.
Both sides have at least some incentive to get a deal. An agreement would give Republicans a chance to change the post-shutdown political narrative that they can’t govern. And with big defense cuts kicking in come January, Republican hawks are already pressuring their leaders to find a way out.
Democrats and the White House, meanwhile, have been chafing as the president’s agenda has been squeezed by both the sequester and a gridlocked Congress. If they give in on taxes in a short-term deal, would they settle for one of the unfinished Obama agenda items that has been going nowhere in this Congress, such as a minimum-wage hike, infrastructure spending or universal preschool?
Without revenue or other incentives, getting the Democratic votes needed to pass a compromise budget could prove difficult.
“It’s impossible to say yet if anything not including revenue would get enough support from Senate Democrats to pass,” one senior aide said.
President Barack Obama has been newly open to a short-term sequester fix that doesn’t include a tax hike. Politico reported that he told Republican senators at the White House that he wouldn’t insist on a tax increase in such a deal.
And he has taken to saying lately that any “long term” deal would have to include revenue, leaving open the question of what to do in the short term.