Budget

Budget deal may be closer, but tax hurdle remains

by Erik Wasson - 11/21/13 5:53 PM ET

Behind-the-scenes talks between Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) could yield a small budget deal right after Thanksgiving, but differences — including on tax revenue — remain, sources said.

The two leaders of the House-Senate budget conference have kept the details of their negotiations close to the vest, but it appears by setting their sights on a small deal, something could be accomplished before the Dec. 13 deadline.

{mosads}“There’s no deal and no announcement imminent. Murray and Ryan are talking and there’s certainly hope that progress can continue and a deal is possible, but there is no deal yet,” a Democratic aide cautioned.

Neither party likes the indiscriminate sequester cuts but Republicans have said they are willing to keep them rather than accept a bad deal. If no budget deal is found, the government could shut down on Jan. 16, or a stopgap measure keeping the cuts could be passed.

The opening House position has been to replace some or all of the sequester cuts for the next two years with mandatory program cuts and to have deficit reduction over and above replacing the sequester. Replacing the sequester fully for two years would cost about $180 billion.

Democrats have countered that a small deal is possible if Republicans are willing to “scour” the tax code for revenue. They produced a list of examples that includes tax breaks for yachts, vacation homes and hedge fund manager compensation.

A GOP aide said Thursday that Democrats have not dropped that demand.

Rep. Tom Cole (R-Okla.) said a solution could come in the form of Transportation Security Administration fees or sales of government assets, both of which count as revenue but not as increased taxes. But he said he did not know that any deal on that was coming for sure.

“I am making my judgment based on body language, not on hard facts,” he said.

—Alex Bolton contributed.

Tags Patty Murray Paul Ryan