Five obstacles facing GOP in budget talks

Republicans in the House and Senate are beginning the delicate task of reconciling their competing budget blueprints, with several obstacles standing in the way of a deal.

GOP leaders muscled budget resolutions through both chambers last week, with the rival documents splitting on issues that could become sticking points in the talks.

{mosads}While Republicans want to adopt a final conference agreement by the April 15 deadline, only two weeks away, it’s likely that work on the budget will extend until later in the month.

Lawmakers won’t return from a spring recess until mid-April, at which point Speaker John Boehner (R-Ohio) will appoint several conferees to try to resolve their differences.

Here are five policy differences that Republican negotiators will have to resolve.

Defense spending

The House and Senate budgets both propose sticking to caps next year that would limit the Pentagon to $523 billion and nondefense domestic programs to $493 billion.

To circumvent the caps, both GOP budgets would pump up the Pentagon’s war fund in 2016 to $96 billion.

That hike became a major issue for House conservatives in March because the funding would require no offsets, and, as a result, would increase the deficit by about $20 billion.

A point of order in the Senate’s budget could make negotiations tricky. The provision would require 60 votes in the Senate to advance any spending bill that would increase the war fund above $58 billion, which was President Obama’s request for next year.

The House and Senate budgets also propose a different path for the Pentagon beyond 2016. While the Senate blueprint sticks to sequestration caps through 2021, the House’s plan would raise the Pentagon’s spending cap by $387 billion over the next 10 years.

Reconciliation

Republicans intend to use the budget procedure to target ObamaCare and send other major policy changes to Obama’s desk. In the Senate, a reconciliation package only requires a majority vote and cannot be filibustered.

But there’s a problem: The House budget instructs 13 authorizing committees to produce reconciliation bills that reduce the deficit. By contrast, the Senate budget issues them only to two — the Finance and the Health, Education, Labor and Pensions (HELP) committees.

In order for a final blueprint to pass with reconciliation, the House and Senate will have to agree on the amount of deficit savings that will be found — and which committees of jurisdiction will do it.

“What [Senate] Republicans are trying to do is not to muddy the water in what they want to put on the president’s desk. They want it very clean,” said Bill Hoagland, a former staff director to the Senate Budget Committee. “They don’t want food stamps involved; they don’t want veterans’ benefits.”

 “It’s a messy process. But at the end of the day, all of the numbers have to add up,” said Hoagland, who is now at the Bipartisan Policy Center.

Medicare and Medicaid

Republicans stumbled over Medicaid during negotiations over the last GOP budget conference agreement in 2005.

Both of this year’s budgets recommend converting Medicaid to a state block grant model. Over the next decade, however, the Senate would cut the program by $400 billion, while the House would cut it by more than $900 billion.

For Medicare, their policies and topline budget numbers are different. The House would partially privatize the program by transitioning it to a premium support model and cutting it by nearly $150 billion over 10 years. The Senate didn’t propose a major change to Medicare and would seek about $430 billion in savings that Obama requested. 

Negotiators don’t necessarily have to focus on the policy changes at the conference agreement stage but must make sure all topline numbers match. Authorizing committees could determine the policy approach later this year.

Cuts to domestic programs

To balance their budgets and offset proposed defense spending increases, Republicans are aiming to slash funding for nondefense discretionary programs over the next decade.

The House would make the deepest cuts, with nearly 

$760 billion over the next 10 years. The Senate would cut funding for domestic programs by $236 billion.

The White House has railed against further cuts to programs outside of the Pentagon, arguing they are already squeezed by sequestration. Obama administration officials insist any increases in defense funding must be matched equally by increases in nondefense spending.

GOP conferees will have to find a middle ground if they want to keep the budget balanced, but they will have to ensure that fiscal conservatives and centrists are onboard with the final number.

Reserve funds

Both budget plans contain what are known as deficit-neutral and spending-neutral reserve funds.

Deficit-neutral reserve funds are more prevalent, and are essentially placeholders for policy changes that are decided later on.

During the Senate’s 16-hour “vote-a-rama” last week, senators offered hundreds of amendments that proposed these funds, and dozens were adopted.

Several funds proposed by Democrats won approval and could pose problems for House Republicans, who only have about a dozen reserve funds in their blueprint.

One would permit legally married same-sex couples to receive equal access to Social Security and veterans’ benefits. Another would require up to seven paid sick days a year for workers.

House conservatives could demand that those funds be dropped in the conference agreement.