Bicameral Budget Conferees Hold First MeetingOctober 30, 2013
The bicameral budget conference committee met for the first time today, Oct. 30—giving the committee roughly six weeks to forge a compromise on the Fiscal Year (FY) 2014 budget resolution. Ahead of the meeting, Republicans and Democrats have already staked out familiar—and conflicting—positions on tax and spending policy.
The budget conference committee is the result of an agreement reached between House and Senate leadership to move legislation to re-open the government following the two-week shutdown and temporarily suspend the debt limit. House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairwoman Patty Murray (D-Wash.) have already been meeting privately to attempt at reconciling the House and Senate passed budget resolutions (H.Con.Res. 25 and S.Con.Res. 8).
The seven members from the House and 22 senators are tasked with presenting a budget blueprint to Congress by Dec. 13; however, there is no enforcement mechanisms or penalties if the conferees fail to reach an agreement or if Congress does not adopt a long-term budget based on the conference committee’s recommendations.
The deep divide between the House and Senate over tax and spending issues will likely complicate negotiations. In general, the House plan would cut spending dramatically without raising taxes, while the Senate plan would cut spending by relatively little, in comparison, while raising taxes substantially.
Specifically, the House budget resolution, which was approved on March 21, calls for an estimated $4.6 trillion in federal spending cuts (based on current policy) from 2014-2023 and provides for no additional tax revenue. In contrast, the Senate budget resolution, which was passed on March 23, calls for $1.85 trillion in deficit reduction over 10 years split evenly between new tax revenue and spending cuts.
Additionally, the House budget would repeal most of the Patient Protection and Affordable Care Act (PPACA), including its exchange subsidies and Medicaid expansion. Whereas, the Senate budget includes full implementation of PPACA.
The House budget proposal calls for revenue-neutral tax reforms relative to the Congressional Budget Office baseline, such as repealing the alternative minimum tax and reducing the corporate tax rate. Roughly half of the Senate’s planned deficit reduction over 10 years—$975 billion—would come from new revenues, mostly from corporations and wealthy households. Yet it remains unclear whether the budget conferees will consider parameters for tax reform or expedited procedures for moving tax reform legislation through Congress.
Despite limited time remaining before the Jan. 15 deadline–when the current spending CR expires–the committee will not be meeting again until Nov. 13. Going forward, meetings are expected to be private versus an open forum such as today’s meeting.