Divide Narrows as Talks to Resolve Fiscal Crisis Go On
By JEREMY W. PETERS, ASHLEY PARKER and PETER BAKER, NYT
WASHINGTON — Political divisions over the nation’s finances appeared to narrow on Friday as President Obama and Congressional Republicans showed greater flexibility in their negotiations. But officials headed into the weekend without a deal to end the shutdown and avert what could be a devastating default after the government reaches the current borrowing limit on Thursday.
While the outlines of an agreement that would involve a temporary fix followed by longer-term budget talks came into view, the president and lawmakers faced the challenge of framing such a deal in a way that all sides could accept politically.
“We’re obviously in a better place than we were a few days ago in terms of the constructive approach that we’ve seen of late,” Jay Carney, the White House press secretary, said late in the day after the president met with the entire Senate Republican conference and consulted by telephone with Representative John A. Boehner of Ohio, the Republican speaker of the House. “But there’s not an agreement.”
Both houses of Congress were scheduled to meet over the weekend. But White House officials and senior lawmakers cautioned against expecting a quick deal, although much of the incendiary speech that has characterized the fiscal fight had given way to words like “constructive” and “progress.”
(More here.)
WASHINGTON — Political divisions over the nation’s finances appeared to narrow on Friday as President Obama and Congressional Republicans showed greater flexibility in their negotiations. But officials headed into the weekend without a deal to end the shutdown and avert what could be a devastating default after the government reaches the current borrowing limit on Thursday.
While the outlines of an agreement that would involve a temporary fix followed by longer-term budget talks came into view, the president and lawmakers faced the challenge of framing such a deal in a way that all sides could accept politically.
“We’re obviously in a better place than we were a few days ago in terms of the constructive approach that we’ve seen of late,” Jay Carney, the White House press secretary, said late in the day after the president met with the entire Senate Republican conference and consulted by telephone with Representative John A. Boehner of Ohio, the Republican speaker of the House. “But there’s not an agreement.”
Both houses of Congress were scheduled to meet over the weekend. But White House officials and senior lawmakers cautioned against expecting a quick deal, although much of the incendiary speech that has characterized the fiscal fight had given way to words like “constructive” and “progress.”
(More here.)
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Senators Susan Collins, Republican of Maine, and Joe Manchin III, Democrat of West Virginia, were drafting a plan to extend the borrowing limit through the end of January and include a stopgap spending measure that would reopen the government through the end of March. Government agencies would have flexibility on how to handle existing across-the-board spending cuts.
Their plan also would call for a delay or an easing of a tax on medical devices and an immediate bipartisan conference for the House and the Senate to begin negotiations over a budget, with the expectation of an agreement by mid-January.
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Isn’t it time to declare that the House Republicans have won ?
They wanted spending cuts, tax cuts for the medical device industry, subsidies for ag, etc. … and they are getting them.
Instead of passing appropriations bills that are haggled out between the Senate and House versions, a Continuing Resolution will be used. So instead of fighting out individual departments … for example, the National Nuclear Security Administration (NNSA) whose FY 2013 budget was $11,501.6 million and FY 2014 requested an increase of $150.9 million or 1.3 percent.
The House Appropriations Committee recommendation is $11,266.0 million, a decrease of $235.6 million or 2.1 percent. Included in that is a cut of $50 million for the Lawrence Livermore National Laboratory ... which essentially forces a personnel cut.
The Senate version authorized increased spending.
There was no House-Senate conference ... instead the CR will define the funding.
Worse yet is the Medical Device Excise Tax repeal ... the tax cut for highly profitable companies that manufacture medical devices will be offset by a change in pension funding requirements for all pension plans.
Think about that ... they take away a dedicated funding source (you sell a pacemaker, you pay a 2.3% tax) and instead replace it with revenues from how pension plans are funded. Now, if a Corporation sees increased costs in operating pension plans, what will they do ? The answer is obvious ... cut back on benefits or terminate the plan. Today, 35% of U.S. workers still have defined-benefit pensions. In 1975, 88 percent of workers with workplace retirement plans had defined-benefit pensions.
Changing pension funding rules will just encourage more companies to dump pension plans ... and thus effectively cut revenues need to support healthcare.
Over time, revenues that would have been coming in from sold medical devices are gone, while lower revenues result from the pension plan gimmick, will cause budget problems in the future ... which will be blamed on Obamacare ... when the blame should go to the change in tax policy.
So, the Republicans will win this time ... what happens on October 1, 2014 ?
Why won't they shutdown again ... as cited in another VoxVerax piece, Republican Mike Coffman in danger of losing his Colorado congressional seat, said
“Whatever the consequences of doing what’s right. I’m willing to take those consequences.”
Come October 1, his reelection will be at stake ... why wouldn't he opt to push for more cuts ... will he anger his supporters if he changes stances or will he attract more supporters by compromising ... my gut tells me that he, and the other House hostage-takers will have no problem shutdown the government again.
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