Budget Conferees Meet to Hash Out CompromiseNovember 13, 2013
Today, the House-Senate Budget Conference committee met for a second time in an attempt to find a compromise between contrasting fiscal 2014 budget resolutions (H.Con.Res. 25, S. Con.Res. 8) adopted by the House and Senate in March. At the very least, conferees hope to agree on an overall discretionary spending cap for the fiscal year that began on Oct. 1, and reduce some of the impact of the coming sequester. One of the main obstacles to a deal is that Republicans have all but ruled out any revenue increase, while Democrats are insisting that the closing of some tax breaks be part of any agreement that builds a new spending plan for the rest of the current 2014 fiscal year.
This meeting was focused on the potential impact on the economy of the various proposals that Republicans and Democrats may consider, with Congressional Budget Office (CBO) Director Doug Elmendorf presenting the independent agency’s analysis of economic expansion and the projected growth of deficits. Click here to view his presentation.
In addition to Elmendorf’s testimony, CBO also released a list of more than 100 options for reducing the deficit — a potential resource for the panel as members look for ways to offset a new round of sequestration. These options are not recommendations by CBO nor are they an exhaustive list, but rather are intended to reflect a range of possibilities encompassing both tax and spending policies. Click here to see the Summary Table of options for reducing the deficit by CBO.
Most of the questioning of Elmendorf centered on taxes, with Republicans arguing that taxes are already more than high enough and Democrats saying more revenue needs to be raised. Sen. Rob Portman (R-Ohio) drew out from the director that projected revenue over the coming decade is estimated at 18.3 percent of GDP, a record high, compared to a historical average of 17.4 percent. CBO projects revenue will reach 19.7 percent of GDP in 2038.
Most of the conference committee activity is taking place behind closed doors and is moving slowly, with the majority believing that the conferees will only be able to achieve a short-term deal to carry a federal spending plan forward for the coming months. The committee has until Dec. 13 to reach an agreement and at this time no further meeting have been scheduled.