Ryan, Repub­li­cans grap­ple with al­ter­na­tive to bud­get

The Pak Banker - - MARKETS/SPORTS -

Meet the new boss. Con­fronting the same tea party chal­lenges as the old boss. Speaker Paul Ryan is scram­bling to avoid an em­bar­rass­ing fis­cal de­feat this year in the face of a hard-right con­ser­va­tive re­volt over last fall's spend­ing-and-tax deal. The same con­ser­va­tives who forced John Boehner out as speaker are mak­ing life dif­fi­cult for Ryan, sig­nal­ing they'll refuse to vote for an up­com­ing GOP bud­get plan that en­dorses the higher spend­ing num­bers from last year.

"We're sim­ply hav­ing the same kind of fam­ily con­ver­sa­tion about how to pro­ceed with the bud­get like we have ev­ery sin­gle year," Ryan told re­porters on Wed­nes­day. "I'm con­fi­dent the mem­bers will sort this thing out." The Wis­con­sin Repub­li­can has built a con­gres­sional ca­reer as the Repub­li­can Party's bud­get sa­vant, but Ryan is per­haps in his ca­reer's most dif­fi­cult bind as he tries to en­gi­neer pas­sage of an al­ter­na­tive to Pres­i­dent Barack Obama's $4.1 tril­lion bud­get that he sent to Congress on Tues­day.

The ques­tion is whether to abide by last year's hard-won bud­get pact, which added more than $80 bil­lion to agency op­er­at­ing bud­gets over the cur­rent fis­cal cy­cle and the up­com­ing 2017 bud­get year. Repub­li­can de­fense hawks com­bined with Democrats seek­ing re­lief from a squeeze on do­mes­tic pro­grams to power the in­creases for­ward, and it was Boehner's fi­nal ma­jor ac­com­plish­ment as he cleared away un­fin­ished busi­ness for Ryan.

Last year's bud­get agree­ment ap­plied to about $1.1 tril­lion in an­nual "dis­cre­tionary" spend­ing for day-to-day op­er­a­tions of the Pen­tagon and do­mes­tic Cab­i­net agen­cies. So-called manda­tory spend­ing such as So­cial Se­cu­rity, Medi­care and health care costs un­der the Af­ford­able Care Act is re­spon­si­ble for the rest of the $4 tril- lion-plus fed­eral bud­get.

Last year's bud­get deal passed with Demo­cratic votes and was ne­go­ti­ated by the Obama White House. But the up­com­ing GOP bud­get - which would give the House and Se­nate Ap­pro­pri­a­tions com­mit­tees the money to do their work - must pass with nearly unan­i­mous Repub­li­can sup­port since it will also call for big, al­beit non­bind­ing, cuts to do­mes­tic pro­grams fa­vored by Democrats.

Many tea party Repub­li­cans, in­clud­ing the 40 or so mem­bers of the hard-right Free­dom Cau­cus that en­gi­neered Boehner's res­ig­na­tion and blocked Ma­jor­ity leader Kevin McCarthy, R-Calif., from suc­ceed­ing him, say they can't go along with any GOP bud­get that en­dorses last year's deal. "I don't think there will be many votes for the Boehner bud­get in the Free­dom Cau­cus," said Rep. Tim Huel­skamp, R-Kan.

On the other side are GOP lead­ers like Ryan, main­stream Repub­li­cans, and the GOP mem­ber­ship of the House Ap­pro­pri­a­tions Com­mit­tee. They say that ad­her­ing to last year's agree­ment, which would pro­vide for $1.14 tril­lion in ap­pro­pri­ated fund­ing for Cab­i­net agen­cies and over­seas anti-ter­ror op­er­a­tions, is the only way to re­vive the trou­bled con­gres­sional ap­pro­pri­a­tions process. The 12 ap­pro­pri­a­tions bills have of­ten been bun­dled into a foot­tall, un­a­mend­able "om­nibus" mea­sure that gets rammed through at the end of the year. A smooth ap­pro­pri­a­tions cy­cle, how­ever, re­quires bi­par­ti­san buy-in. And liv­ing within last year's bud­get pact is the only way to en­sure that both Democrats and Repub­li­cans will de­liver votes for the 12 an­nual bills. Se­nate Democrats stalled the bills last year as they teamed up with Obama to suc­cess­fully force Repub­li­cans to add money for their do­mes­tic pri­or­i­ties - and any move the go back on those in­creases would mean an im­me­di­ate re­turn of grid­lock.

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