Budget deal: Winners and losers

Congress agreed early Friday morning to pass a two-year budget deal that raises funding levels and suspends the debt limit until 2017. The last-minute accord marked one of the last achievements of outgoing Speaker John Boehner (R-Ohio), and draws the curtain on the fiscal fights that were central to President Obama’s feud with congressional Republicans.
 
{mosads}Here are the winners and losers from this latest round:
 
WINNERS
 
Former Speaker Boehner
 
Boehner’s top priority after announcing his resignation was to “clean the barn” for his successor. And despite long odds, he managed to get a whole lot out of that barn with this budget deal. The two-year deal sets top-line funding numbers for lawmakers, and also deals with the debt limit until March 2017. Throw in the fact that the deal has a few tweaks to entitlement programs and ObamaCare, and it’s not a shabby send-off for Boehner.
 
New Speaker Paul Ryan (R-Wis.)
 
Ryan deliberately steered clear of the budget talks, but the new Speaker’s life got much easier when the deal was struck. The budget pact puts to bed a number of contentious fiscal fights, giving Ryan a long runway to get up to speed as the House’s new leader. While Ryan decried the closed-door talks that led to the budget deal, he ultimately voted for it. And now he does not have to worry about a budget fight or debt limit feud for quite a while.
 
Senate Majority Leader Mitch McConnell (R-Ky.)

The budget deal is also a feather in McConnell’s cap. Eager to retain his majority in the Senate, McConnell, in striking the early accord, erased the chance of nasty fiscal fights that could wreak havoc on Republican reputations in the middle of a tight 2016 campaign.
 
President Obama/Nancy Pelosi (D-Calif.)/Harry Reid (D-Nev.)
 
Democrats went into budget negotiations with a specific goal in mind: lift the spending caps set by the sequester. And they got it. The final budget deal of Obama’s presidency pushed government funding above those spending caps, while removing the debt limit as a hurdle to clear for the rest of his time in office.

The final package avoided any major changes to entitlement programs, and garnered unanimous support among House Democrats.
 
Defense hawks
 
Defense hawks and the Pentagon were eager to dodge sequester cuts yet again, and got a break in the budget deal. Defense spending jumps $40 billion in the budget, on top of another $32 billion to cover military operations abroad that falls outside budget limits via the Overseas Contingency Operations (OCO) fund.
 
Medicare/social security

Roughly one-third of Medicare enrollees dodged a 52-percent premium hike thanks to the budget deal, which includes a loan from the federal government paid by future premium hikes. And Social Security’s disability trust fund got a much-needed cash infusion as well. That fund would have gone dry next year and enrollees were facing steep cuts, but a slice of the payroll tax as part of the budget deal helps shore it up.
 
Appropriators
 
The budget deal gives congressional appropriators the ability to do something that they often miss: appropriate. Setting top-line numbers for the next two years gives members of the House and Senate Appropriations committees the chance to craft funding bills that go beyond short-term continuing resolutions to avert government shutdowns. And Speaker Ryan’s commitment to regular order improves the odds that the regular appropriations process could be making a comeback.
 
LOSERS
 
Hedge funds and private equity firms
 
Large partnerships like hedge funds and private equity firms were losers in the final budget deal, as one of the major offsets in the package will lead to heightened IRS scrutiny for that sector. Roughly $11 billion of the package is paid for by making it easier for the government to audit large partnerships. Previously, tax rules made it almost impossibly complex to audit large partnerships, but that process is now streamlined, making it easier for the tax man to come calling.
 
Conservatives/House Freedom Caucus
 
Conservatives wanted Congress to stick to the sequester spending caps, and hated seeing budget deals hammered out in private by just a handful of policymakers. But at the end of the day, Congress ended up passing a bill that exceeded previously set spending caps that was negotiated by a handful of congressional leaders and the White House.

The budget deal went from being unveiled to passage in just a matter of days, and while plenty of Republicans ended up opposing it, the deal never faced any significant threat of derailment. The question for conservatives now is whether that budget deal was the last gasp of the Boehner Era, or a sign of more to come.
 
Budget hawks
 
Budget hawks were dismayed to see a budget deal come together that busted previously agreed upon spending caps. They decried what they saw as a host of gimmicks meant to cover the extra $80 billion in spending, not to mention an extra $32 billion in Overseas Contingency Operations fund, which, falling outside budget caps, policymakers did not even try to offset.

The deal also includes some other policy tweaks to boost offsets, such an overly optimistic outlook on how much could be made selling oil from the Strategic Petroleum Reserve, and the “pension smoothing,” which allows Congress to count inflated revenues in the near term by tallying lower revenues years down the road.
 
Hospitals/drug companies/ObamaCare
 
The budget deal’sb ultimate price tag came to rest partially on the back of the health care sector. The deal includes a 2-percent cut in Medicare provider payments, and also prevents hospitals from buying up off-site locations as a way to increase pricier outpatient services that are covered by Medicare.

Furthermore, generic drug makers are now required to pay an additional rebate under Medicaid if drug costs grow outpace inflation — name brand drugs already have to pay that rebate.

Another $8 billion of the budget is paid for by killing a yet-to-be-enforced part of ObamaCare that would have required large employers to automatically enroll new employees in health plans.

Outside conservative groups 


It was a rough stretch for outside conservative groups that have frequently worked to flex muscle in the Capitol. Heritage Action and Club for Growth joined forces to blast the budget accord as it drifted away from spending caps — and put lawmakers on notice that they were watching the vote. But it ultimately was for naught.

To add insult to injury, just days before the budget passed, more than half of the House’s Republicans joined with Democrats to move a bill reauthorizing the Export-Import Bank. Forcing that bank’s charter to expire had been a major coup for the conservative movement, which has dismissed the government agency as corporate cronyism. But the leadership shakeup gave Ex-Im backers the chance to move on a rare discharge petition, circumventing leadership opposition and bringing the bill up for a floor vote. Ex-Im’s fate is still up in the air in the Senate, but vehement conservative opposition to its renewal in the House gave way to a reauthorization vote that garnered 313 ‘yeas.’