Dodged Another Bullet-- Budget Deal Doesn't Really Suck!

Boehner's revenge on the GOP's far right fringe?

Yesterday afternoon brought word that Obama and Boehner had come close to reaching a deal to raise the debt limit until March 2017 and bust sequestration spending limits by $112 billion, split evenly between defense and domestic spending. It lets Ryan off the hook and will let the right-wing loons all vent on Boehner as he packs up his gold clubs and heads back to Ohio-- and it also guarantees that there will be no threat of another Republican government shut down between now and the 2016 election. [UPDATE: And here's the bill, all ready to go. Someone has certainly been busy sneaking around, deceiving their conference-- both their conferences.]

Asked if Ryan participated in the talks, Sessions said the deal was arranged and negotiated by Boehner and would be finalized by Boehner.

“In my opinion Paul will be responsible for things when Paul becomes speaker,” Sessions said. “Paul is not responsible for this.”

Sounds good? On first blush my thoughts were: "Not so fast."

Early reports were that all $112 billion would come from cuts to Medicare and Social Security disability benefits, a non-starter for progressives. The deal was supposedly agreed to by McConnell, Reid and Pelosi, all of whom will have pissed off conferences to deal with.

The timeline is tight for building support for the plan with the Treasury Department saying the debt ceiling will be hit by Nov. 3.

Leaders presented details of the deal, which is expected to include equal increases in both domestic and military spending and would prevent a premium increase for Medicare Part B recipients from going into effect, to members late on Monday.

“What has been presented seems like a path forward,” Rep. Charlie Dent (R-Pa.) said after leaving a meeting of House Republicans. “I want to get all the details.”

He added: “People are just taking it all in.”

The deal would include about $80 billion more in spending over two years, which would be offset by savings from changes to the Social Security Disability Insurance fund and Medicare payments to doctors and other health care providers.

The proposal being negotiated would set the top-line spending numbers and give the House and Senate Appropriations Committees until Dec. 11 to decide how it should be parceled out among federal agencies and programs.

There is no guarantee that the spending cuts will be sufficient to convince wary Republicans to vote for the spending bill and an increase in the borrowing limit.

House Republicans met at 6 p.m. Monday to discuss the potential budget deal. And there was grumbling on the right-- since turned to sky-is-falling fury. Alabama's KKK Senator, Jefferson Beauregard Sessions III, says his knees are quivering. The far right is dismayed they don't get another government shut-down. The Establishment's attitude to their right fringe is "pound sound, assholes, and go whine about process." North Carolina extremist Mark Meadows immediately obliged, telling the media that "Anyone who supports this legislation is complicit in supporting the way things are in Washington." He demanded Ryan oppose it.

At first, wary progressives were concerned about cuts to benefits. Alan Grayson read about it in the NY Times and was immediately suspicious and said if the bill did include cuts to Social Security and Medicare and "if I were in the U.S. Senate, you can bet that I would filibuster" it. OK, good-- and he's right. In fact, the New Dem running against him for the open Florida Senate seat, Patrick Murphy, has said he's willing to make "structural changes to Medicare and Social Security," exactly what Mitch McConnell and Paul Ryan say, even though there's a strengthening consensus among Americans that Social Security and Medicare need to be expanded, not cut back. This afternoon, Grayson was still trying to come to grips with what's in the actual bill. He said there's much in the deal he wants to support but there also are items that "could mean a potential vote against it," signaling that progressive Democrats are not entirely on-board with the deal. Concerns include a new layer of means-testing to Social Security disability benefits; the extension of a 2 percent cut in doctors' reimbursements under Medicare; termination of a pilot program in Florida to determine disabilities; and no cost-of-living increases for seniors' Social Security benefits. He said the potential deal-breaker for him, though, is the budget package's elimination of mandates that small employers provide health care insurance, as required, but not yet administered, under the Affordable Care Act. "The single, most-destructive element of the deal-- I don't want to say it's entirely destructive-- is the last one," he said. "My hunch is we'll see hundreds of thousands of people losing their health care insurance... Some of those people will get seriously ill and some of them will die without mandated insurance."

As Jim Dean of DFA said yesterday "The White House needs to know that any budget deal that cuts Social Security, Medicare or Medicaid benefits or eligibility for those benefits is unacceptable to the American people and roughly equivalent to declaring a holy war on struggling working families near the kick-off of the 2016 election... Democrats should be looking for ways to build on the momentum growing behind Social Security expansion, not working with Republicans to sneak in benefit cuts that will force widows, orphans, and the elderly to start eating cat food."

The first of the Blue America candidate to voice alarm was Lou Vince (CA-25) who had just been endorsed yesterday by Ted Lieu. "Yet again, Republicans have proven they are out to harm the working and middle classes in order to make the rich even richer. Social Security and Medicare should be off-limits to any cuts because these programs are what ensure that our seniors are not living in poverty and that they have a basic safety net. These programs are constantly under threat and it's ridiculous that these people's livelihoods are just a political bargaining chip to Republicans. These programs do not allow seniors to live comfortably but only give them the bare minimum they need to survive. I would do everything in my power to stop these cuts if I was in the House, instead of Steve Knight, who will surely vote to further impoverish our seniors."

As it turns out, though, Grayson and Vince can save their battle-preparedness for next time. In the light of day, this bill doesn't look nearly as dire as it did yesterday.

According to sources, Congress would cover some of the costs by selling additional broadcast spectrum bandwidth and oil from the strategic petroleum reserve, as well as by making changes to crop insurance programs. A host of lesser known items also would likely find the chopping block.

But the real pay-for would be felt on two major entitlement programs. The deal would extend the sequester's cuts to mandatory spending through 2025, which mostly involves a 2 percent cut in reimbursements to Medicare doctors. That reduction was scheduled to expire in 2021 under the 2011 Budget Control Act, which put sequestration into place. It was extended to 2023 under Murray-Ryan deal.

The new agreement also would prevent a 20 percent cut in benefits next year to the 11 million Americans enrolled in the Social Security Disability Insurance program. The cut would be avoided by diverting some of the incoming payroll tax money from Social Security's much bigger retirement insurance program for six years, something Republicans previously said they wouldn't do without cuts to benefits.

Hill sources said the disability changes would save roughly $4 billion to $5 billion over 10 years by requiring all states to have doctors review initial disability applications, which in some states are now checked by Social Security Administration officials and not medical professionals.

One source said the deal would also set up demonstration projects in which some people who receive disability benefits could earn money from working with less fear of triggering a review that can result in benefits being cut off. Instead, people participating in the projects could see their benefits gradually curtailed as their income rises-- an idea Ryan seemed to favor at a hearing earlier this year.

Democrats are unlikely to be overly offended by a demonstration project if the deal prevents the looming 20 percent benefit cut. Demonstration projects also served as a consolation prize for conservatives after they failed to get bigger cuts to food stamps in a farm bill last year.

One source questioned why Republicans would like the disability part of the bargain, since it's unlikely to be too upsetting to Democrats. "It's not bad enough to buy Freedom Caucus votes," said the source, referencing the band of House conservatives who have demanded continued austerity in such negotiations.

Though the topline numbers appear favorable to Democrats, the negotiations didn't come without concessions. Two major lingering issues-- the extension of the highway trust fund and the reauthorization of the Export-Import Bank charter-- are not addressed in the prospective deal.

A source familiar with the talks said the bill also makes an alteration to the president's health care law by repealing a provision that requires employers with more than 200 workers to automatically enroll employees into employer-sponsored health care coverage. This change mirrors legislation sought for by the business community, sponsored by Sen, Johnny Isakson (R-Ga.).

The Washington Post's Greg Sargent talked with Nancy Altman, the president of Social Security Works, "a group that strenuously opposes benefits cuts and argues for their expansion, tells me that the deal 'doesn’t actually cut benefits or really hurt beneficiaries who aren’t gaming the system.'"

Altman says the Medicare cuts are all on the provider side, which could harm beneficiaries at some point, but it’s not a major concern. “On the Medicare side, they limited their cuts to far in the future, and to providers,” Altman says. “There’s time to correct that.”

On the change to Social Security disability, Altman says: “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. They didn’t change eligibility requirements or reduce the level of benefits.”

Altman notes that Republicans had been threatening to demand serious Social Security and Medicare cuts in exchange for raising the debt limit, but adds this threat has been defused. “The hostage has been released,” Altman says.

It still remains to be seen whether today’s deal will pass Congress. But for now, it needs to be judged against the alternative: lower spending levels that would constitute a drag on the recovery; more debt limit and government shutdown crises, with a worst-case scenario involving widespread economic damage (which also could have hurt Dem chances in 2016); a deal in which benefits really were cut.

If you are still nervous... AARP endorsed the deal: "On behalf of our 38 million members and as the largest nonprofit, nonpartisan organization representing the interests of Americans age 50 and older and their families, AARP strongly supports the bipartisan agreement you have reached to avert deep reductions in Social Security Disability Insurance benefits in 2016, and to address the imminent spike in Medicare Part B premiums which many older Americans would otherwise experience. Your efforts to reach across the aisle and together find sensible solutions to significant problems are appreciated and commended."