A Budget Deal on the Horizon?

Both sides caution there isn’t a final deal yet, but an agreement appears to be in the works for a two-year budget that would avoid another damaging government shutdown and replace half the sequester cuts poised to fall on the Pentagon and domestic programs.

The process is still fluid with lots of moving parts, but negotiators are working toward a House floor vote that would meet the deadline of Friday, Dec. 13, when the House adjourns for the holidays. “Things are headed in a good direction,” says a Senate budget aide. “It’s not a done deal yet, but there’s a sense it can get done in the next few days.”

It’s news in Washington when lawmakers actually accomplish a task after so much partisan gridlock, and everyone cautions things could yet fall apart. If the agreement holds, credit goes to House and Senate budget committee chairs, Rep. Paul Ryan and Sen. Patty Murray, for quiet perseverance in finding common ground, and to the general exhaustion of lawmakers in both parties who didn’t want to put themselves, and the country, through the wringer again over the budget.

The potential deal, as described by aides on background, comes in at around $1 trillion, a compromise between the GOP’s $967 billion and the Senate Democrats’ $1.058 trillion. It would eliminate about half of the $91 billion in sequester cuts that would otherwise kick in on Jan. 15 by finding savings and new revenue that can get around the GOP’s refusal to raise taxes. “This is a deal many Democrats will be happy with,” says a Democratic aide. “The sequester is such a big problem for families with kids in Head Start and for medical research, and we know it’s hurt the economy. [Sen. Murray] would have loved to replace the whole thing. If it comes together, it replaces as much of the sequester as possible, as much as the Republicans would allow.”

At a press conference Thursday in the Capitol, Minority Leader Nancy Pelosi and other Democrats pushed back against some of the rumored components of the emerging framework. The notion that federal workers are singled out to contribute more to their pensions, in the absence of a bigger deal that would spread the pain among more Americans, elicited stinging criticism from Maryland Reps. Steny Hoyer and Chris Van Hollen, who represent a lot of government workers. “Why are we asking them to pay something when we’re not asking the owners of corporate jets to take some of their subsidy?” asked Van Hollen. “They’re always going after the little guy and not letting the big guy contribute,” he continued, pointing out that another aspect of the deal that’s being floated would raise airport fees on the traveling public.

Whether the agreement as it’s being crafted can pass the House is the next big hurdle. Can Ryan and Murray find the sweet spot that will attract enough Republicans without alienating Democrats?

More Democrats perhaps than Republicans want to get this deal done because the alternative would be another continuing resolution to keep the government open but at the sequester levels of spending, which Democrats find painful though many Republicans are cheering. “Keep the Caps” has become a rallying cry on the right to keep sequester spending caps in place. The Wall Street Journal editorial page encourages Republicans to stick with the caps, as do conservative groups, including Heritage Action, and no-tax guru Grover Norquist.

“Ryan will have to deal with all that,” says the Senate Democratic aide. “We assume he can take the heat.” Tea Party purists won’t go for any compromise, and Ryan’s ability to court enough votes among his Republican colleagues will be tested. “The past is prologue,” says a Democratic House leadership aide. “They haven’t been able to do anything on their own. That gives us some leverage. They have to come to us.”

Pelosi wants an extension of unemployment benefits set to expire for the long-term unemployed. Republicans refused to put that in the budget deal, but Speaker John Boehner said Thursday he is open to a separate measure, and Pelosi says she could accept a “side car” to the budget. It’s the kind of dance that we’ll see more of in the coming days, as the House gets set to adjourn. “We disagree on government and the role of government,” Pelosi said Thursday. “This isn’t about partisan bickering.”