White House, budget chairmen give bleak outlook for deficit agreement

Key congressional and White House players on Tuesday presented a bleak outlook for getting a major deficit agreement this year and said that after 2013, the prospects will only get worse.

Their comments also strongly indicated that a major crisis over the need to raise the nation’s debt ceiling is on the way.

House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairwoman Patty Murray (D-Wash.) told the audience at the Washington’s annual Peterson Fiscal Summit that they are at a stalemate on reconciling the different House and Senate 2014 budgets.

“I find myself in a very difficult position, unable to negotiate a way forward,” Murray said. 

She said while she and Ryan have had some private discussions, they were not going to yield anything. 

“If you are in a closed room and there’s two of you are not going to get to a deal,” she said. 

Ryan said that if a conference were convened immediately, it would likely fail. That would allow House Democrats to offer disruptive motions on the House floor for a vote.

“We would surrender the majority,” Ryan said.

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He said Democrats would stage votes shooting down a proposal in the 2014 Obama budget to lower Social Security benefits by changing the way inflation is calculated. Such a vote on chained CPI would likely succeed, and make compromise more difficult.

“If you a have a month-long stalemate you make it that much harder to get an agreement,” Ryan said. 

He said that he wants to get a framework agreement on a down payment for the deficit centered on elements of commonality in the Obama budget and his own budget, such as means testing Medicare benefits. 

“We can’t even get an agreement in principle to begin talking about that right now,” he said. 

Ryan said that a “grand bargain” that fixes entitlements is not possible, but tax reform could happen. 

The White House was similarly downbeat. Top economic adviser Gene Sperling said that President Obama was trying hard to build trust with Republicans, but the ball is their court to match his budget entitlement cuts with their own concession. 

“I think all we can do is every day is wake up and do everything we can to create the conditions,” Sperling said. 

“All the president can do is make his proposals and keep playing golf with Republicans,” former President Clinton said. 

Sen. Rob Portman (R-Ohio) said only a real crisis over the debt ceiling could break the gridlock.

Portman, a former Bush budget director who has been wooed by Obama as a possible dealmaker, said some members of his conference want to wait until a new president is elected in 2017 before doing a deal.

But he said the majority of his conference feel the debt is such a problem they should try to do a deal with Obama this year instead.

But he said there is skepticism after Obama failed to champion the Bowles-Simpson deficit plan in 2010 and treated Ryan harshly in 2011 over his Medicare plan.

“In terms of his inability to show leadership, no wonder there is some skepticism,” Portman said. “It is a healthy skepticism.”

He acknowledged that Obama may be more willing to compromise than congressional Democrats on entitlement cuts and commended him for including chained CPI in his budget.

“We are not lacking ideas, we are lacking political will,” he said. 

Portman said the need to raise the debt ceiling will be a painful crisis, but it could force a deal.

“I have heard the president say we should take it out of the political equation,” he said. “Over the last three decades it is the only thing that has worked. … It is a good leverage point because the American people get it.”

Sperling said Obama is not going to negotiate over a debt-ceiling increase, however.

“He is simply not going to negotiate on the debt limit,” Sperling said. 

The fiscal summit did offer some tiny glimmers of hope for a deal. Murray said she opposed chained CPI but acknowledged it was put out by Obama as an attempt at compromise.

When asked what parts of the House budget were completely off the table, she only mentioned Ryan’s plan to partially privatize Medicare.

“The absolute non-started is the voucher for Medicare proposal,” she said.

Ryan, asked if he would flatly oppose raising the cap on Social Security payroll taxes as part of deal, did not flatly rule it out. 

He also said that he does not expect his entire budget to be enacted as part of a deal.