The Budget Debate: What Now?

by Andrew Stiles

The Senate rejected two long-term spending resolutions on Wednesday — a Republican plan to cut $61 billion and a Democratic plan to cut $4.7 billion (all in non-defense discretionary spending) — potentially setting the stage for a grand bipartisan compromise. 

In perhaps a telling sign that a deal is in the offing, President Obama, after weeks of sitting on the sidelines, finally entered the mix, meeting with Senate Democratic leaders at the White House this afternoon.

Following that meeting, Senate Majority Leader Harry Reid (D., Nev.) indicated that a long-term solution was being negotiated. “With this vote out of the way, we’re going to do some serious negotiations now — this paves the way to get something done,” Reid told Talking Points Memo. “We’re working on a number of issues. But our goal is to fund the government the rest of this year, and then out-years. This isn’t just for the next few weeks. We want to try to get a universal deal, and do something good for the country.”

It has also been confirmed that Vice President Joe Biden, who is currently out of the country, spoke by phone with both House Speaker John Boehner (R., Ohio) and Senate Minority Leader Mitch McConnell (R., Ky.) before the votes.

Earlier today, Sen. Chuck Schumer (D., N.Y.) called for a “reset” of the budget debate. In a speech at the Center for American Progress, a liberal think tank, Schumer recommended an “all of the above” approach that did not focus solely on cuts to non-defense discretionary spending, but included things like taxes, entitlements, and defense spending as well, and drew on the solutions put forward by the president’s deficit commission.

Schumer reiterated this view following today’s votes. He said the fact that neither spending bill received enough support to pass should provide the impetus to forge a bipartisan compromise. “We needed to show today that neither side has full consent and that importunes both sides to start talking as soon as possible,” he told reporters. “My view is that the way you get both real deficit reduction and job growth is not focusing solely on domestic discretionary, even though there ought to be cuts there.”

A broad agreement, Schumer argued, was “the most logical solution . . . because I don’t know if you stick to domestic discretionary alone whether you can actually come up with a compromise that’s acceptable to the House and Senate.”

Schumer also attended today’s meeting with the White House, but refused to discuss details other than saying that President Obama has been a “very positive force” in the discussions (Republicans would certainly beg to differ). He did acknowledge, though, that his party would have to move closer to the GOP position on the spending side. “We’re willing to move further,” he said. “That’s what today’s vote showed. But [Republicans] have to move as well. . . .Where are they willing to move?”

The need for further concessions on the Democratic side was illustrated by the fact that ten Democrats voted against their own plan. Several of them explicitly stated that the current Democratic position was unacceptable. Sen. Joe Manchin (D., W.Va.) said the Democratic plan “utterly ignores our fiscal reality.” Sen. Claire McCaskill (D., Mo.) said there are “way too many people in denial” about the need to rein in spending, referring to members of her own party. Sen. Ben Nelson (D., Neb.) said: “I don’t want to go closer to the middle. I want to go closer to the $50 billion range.” All three senators are facing tough reelection battles in 2012.

By comparison, only three Republican voted against the GOP plan — Sens. Rand Paul (R., Ky. ), Mike Lee (R., Utah), and Jim DeMint (R., S.C.) — all members of the Senate Tea Party Caucus, and only because they thought it didn’t go far enough.

However, Schumer said it was incumbent upon Republicans to cede ground of their own. “Everybody has to give,” he said. “We know our bill isn’t a finished product. They’ve been acting like theirs is.”

For its part, the White House played down Schumer’s notion of a grand bipartisan bargain. “I don’t think that anyone thinks between now and March 18th we will resolve entitlement reform, tax expenditures, and all the other issues that go into a much bigger deal,” said White House Press Secretary Jay Carney. “We need to resolve the issue on the table, which is funding for fiscal year 2011.”

Republicans weren’t embracing it either. A senior GOP Senate aide tells NRO: “It doesn’t help to hit reset if you aren’t ready to install a new operating system. Senator Schumer would do the country a great service by defining in detail what ‘all of the above’ means. Reducing discretionary spending is part of our ‘all of the above’ strategy and always has been.”

In the meantime, the House Appropriations Committee is drafting another short-term spending resolution to prevent a government shutdown in the (likely) event that an agreement is not reached before March 18, when the current resolution expires. A GOP House aide tells NRO that the measure is likely to span four weeks and cut spending by $8 billion, incorporating many of the same cuts proposed in the Democratic bill that was voted on today in the Senate (and none of the controversial policy riders in the GOP bill, e.g., defunding of the EPA and Planned Parenthood), thus making it nearly impossible for Democrats to oppose.