Relief on Capitol Hill after budget deal

The tentative budget deal agreed to late Monday night between House and Senate leaders (and representatives from the White House) was greeted mostly with a sense of relief on Capitol Hill on Tuesday.

Rather than trumpet the reported tangible benefits or even take shots at the compromises and concessions, the spin in most of official Washington seems to be that the budget brinkmanship that marked much of the five-year tenure of House Speaker John Boehner, R-Ohio, is (like Boehner’s speakership) soon to be a thing of the past.

In stepping down and presumably handing the gavel to Rep. Paul Ryan, R-Wis., Boehner said he wanted to “clean the barn” for his successor. Without the Ohio Republican’s mucking out, the incoming speaker would have almost instantly faced a divided caucus in the battle to raise the debt ceiling, something periodically required to maintain a healthy relationship with the government’s creditors. Then in December, the stopgap spending agreement passed earlier this month would have expired, setting up another internal tug of war in the congressional GOP.

Under those circumstances, Monday night's tentative deal reveals that after years of debt ceiling crises and automatic sequester cuts, the best that lawmakers could achieve was to avoid another season of crises.

For two years, anyway.

The deal funds the government at levels higher than the sequester that went into effect during the 2013 budget deadlock, which imposed mandatory cuts in spending on programs important to both parties. It makes some changes to Medicare and Social Security disability payments and lifts the limit on government borrowing through late 2017; the two-year cease-fire in showdowns over the debt limit is being billed as a win for both sides. While avoiding such manufactured crises is considered by most economists and government vets as a plus for the U.S. economy, the real victory for most in Congress is a political one. Republicans in the leadership have long understood that the fallout from partial or full government shutdowns lands at their doorstep. The Democrats, seen by voters as in control of the economy by virtue of having control of the White House, are happy to dodge another destabilizing standoff.

Similar logic applies for the upticks in spending. The sequester was, by most estimates, slowing the recovery. The restoration of $40 billion to the nonmilitary side of the budget — about a quarter more than what it got under the 2013 deal between Ryan and Sen. Patty Murray, D-Wash. — temporarily eases up on the economic brakes, even if it doesn’t really press the accelerator. 

Perhaps the parts of the bargain receiving the most attention so far are changes to Social Security and Medicare.

Social Security disability insurance (SSDI) guidelines currently differ by state, but Monday’s agreement would standardize and slightly tighten eligibility rules, which is projected to save the government $5 billion. Money would be transferred among Social Security trust funds to keep disability officially solvent — a move that used to be accomplished without much objection before the more recent era of fiscally hawkish Republican majorities in the House.

Many of those who favor social spending see the deal as a win, in that it isn’t a defeat. “They stiffened the penalties for fraud, they extended nationwide efforts to make sure that payments are accurate, and they closed a loophole in which people were gaming the system,” said Nancy Altman, the president of Social Security Works, a group that advocates Social Security expansion, in an interview with Greg Sargent. “They didn’t change eligibility requirements or reduce the level of benefits.”

Should the deal pass, Medicare Part B recipients dodge a hike in out-of-pocket expenses that would have been triggered by the absence of cost-of-living increases in Social Security (the result of recent low inflation). Payment for this would come out of future cuts that safety-net advocates say are minimal and drawn mostly from the provider side.

There is also a change to the Affordable Care Act, eliminating the requirement for businesses over 200 employees to automatically enroll workers in health plans. It’s a requirement that has yet to kick in and one that was the recent target of GOP ire.

More will likely be revealed in the coming days, and given the vocal objections of conservative Republicans fresh off flexing their political muscle during the fight over Boehner’s successor, passage of the deal as currently described is far from guaranteed. The earliest possible opportunity for Congress to vote on the agreement will come on Wednesday. But most of Washington appears to be claiming victory in having achieved sufficient agreement to avoid another crisis — for now.