Leaders from both side in Congress are throwing their collective weight behind a hard fought, two year bipartisan budget plan aimed at heading off a looming government debt crisis and forestalling a government shutdown in December.
The pact, which would take these volatile issues off the table until after the 2016 presidential election, emerged in after all day negotiations that concluded right around midnight Monday on Capitol Hill. The new deal would provide money to both the Pentagon and domestic agencies $80 billion in debt relief in exchange for cuts elsewhere in the budget.
The new pack represents the last deal done between President Barack Obama and departing House Speaker John Boehner. This deal is not done yet and it depends in great measure on the reception it gets from restive House Republicans, including a number of conservatives who are far from pleased with the deal.
Boehner had promised to clear away as much business as possible before handing his speaker’s gavel to Paul Ryan, R-Wis. The newly-assembled budget plan would restore order to Washington and remove the threat of budget and debt chaos and it was a major goal of congressional Republicans like Senate Majority Leader Mitch McConnell of Kentucky, a key architect of the pact.
The legislation would suspend the current $18.1 trillion debt limit through March 2017. The budget portion would increase the current “caps” on total agency spending by $50 billion in 2016 and $30 billion in 2017, offset by savings elsewhere in the budget. And it would permit about $16 billion to be added on top of that in 2016, classified as war funding, with a comparable boost in 2017.
It also would clean up expected problems in Social Security and Medicare by fixing a shortfall looming next year in Social Security payments to the disabled, as well as a large increase in Medicare premiums and deductibles for doctors’ visits and other outpatient care.
The White House and GOP have also struck a major deal on an ObamaCare provision that requires large employers to automatically enroll new employees in health plans and rollover current employees.
That measure, which has been twice delayed, has not yet gone into effect. It has already passed the House as part of its budget reconciliation measure earlier this month. That change alone was expected to save about $8 billion through 2025, according to CBO.
In another win for Democrats, the budget deal incorporates a cost-saving strategy for Medicaid, in which generic drug makers are required to pay additional rebates to state Medicaid programs when their drug costs increase faster than inflation.
The idea has been pushed by Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.), who say it would help save Medicaid about $500 million over 10 years.
Still, as the deal took shape Monday, talk of shrinking some Social Security benefits was generating strong outcry from liberal groups like the Progressive Change Campaign Committee.
“The White House, every Democrat running for president, and every Democrat in Congress should make clear that any deal that cuts Social Security, Medicare, or Medicaid benefits would be unacceptable policy and politically, would be wildly unpopular with voters,” Adam Green, co founder of the progressive group, wrote in a statement late Monday.
