Budget conference set to launch against long odds

House and Senate negotiators will be focused on a small deal instead of a grand bargain when they meet Wednesday to begin their first budget conference since 2009.
 
Republicans and Democrats are talking about replacing all or part of the sequester, but divisions over the old question of new taxes could thwart a deal.
 
{mosads}The first meeting is expected to run some three hours, but will include little actual negotiation as all 29 members deliver opening statements.
 
One immediate question is whether the conference will work through the House recess that begins Wednesday. The House will be out until Nov. 12, and the conference faces a Dec. 13 deadline to report back to Congress.
 
Striking a deal could make it easier to raise the debt ceiling before Feb. 7, when the current extension expires.
 
But if the sides can’t come together, another stopgap measure could be needed to prevent a second government shutdown. Funding is set to run out after Jan. 15.
 
In a sign of the tough road ahead, squabbling on taxes had already started.
 
“If people see this as an excuse to raise taxes, we’re not going to get anywhere,” House Budget Committee Chairman Paul Ryan (R-Wis.) said Tuesday.
 
“I’m concerned that our Republican colleagues began by taking things off the table,” said Rep. Chris Van Hollen (D-Md.), the ranking member of the House Budget Committee.
 
The budget conference was convened as a result of the deal to end the shutdown crafted by Senate Minority Leader Mitch McConnell (R-Ky.), and the Senate GOP could play an essential role in the talks.
 
Elements of the debt-ceiling deal were pushed by Sens. Rob Portman (R-Ohio), Kelly Ayotte (R-N.H.) and Lindsey Graham (R-S.C.), all of whom are serving on the conference.
 
The Senate GOP met Tuesday, with members weighing whether to offer their own proposals or defer to Ryan.
 
Portman and Graham said Tuesday they were still mulling their approach. Graham, an outspoken critic of defense cuts, had decided to “just show up” and see what would unfold at the budget meeting.
 
Senate Budget Committee ranking member Jeff Sessions (R-Ala.) said the Senate GOP members will be offering their proactive solutions.
 
“We are going to make some proposals and advocate for them,” he said. “I suspect Sen. Portman has got an important proposal. I’ve proposed a series of budget reform acts that I suspect will get some bipartisan support.”
 
Sessions said the focus should be on smaller reforms, not a grand bargain.
 
“It would be great if that could happen but I do think that would be unrealistic to expect that a big deal could be accomplished between now and Dec. 13,” Sessions said.
 
He said Senate Republicans agree on one point: the sequester cuts should be kept in place or replaced only with spending cuts.
 
“In terms of the Budget Control Act there is no support on our side for replacing the agreed spending levels, to spend above BCA by increasing taxes,” he said.
 
Portman, who said Tuesday he was still developing his approach, floated a draft plan to end the shutdown earlier this month.
 
His plan would have kept the top-line spending level at the $967 billion sequester level, and imposed $600 billion in mandatory spending cuts in exchange for a medium-term debt-ceiling increase. It also would have instructed committees to come up with revenue-neutral tax reforms.
 
Another source of compromise could come via panelist Rep. Tom Cole (R-Okla.), an ally of Speaker John Boehner (R-Ohio).
 
Cole has repeatedly indicated an openness to increased revenues during budget talks. He said Tuesday that ruling out all revenue at the outset isn’t a productive way to start off talks.
 
“I don’t think it’s helpful to take things off the table going into the negotiations. Let’s just see where we end up,” he said.
 
Cole acknowledged that Ryan will play a dominant role in steering the talks. Asked if the two were on the same page on revenues, Cole demurred.
 
“He’s got chairman, so I think I’m on his page, obviously,” he said.
 
Ryan told reporters he feels he has leeway to cut a deal.
 
“I think they’re pretty much deferring to us,” he said of congressional leaders. “I’m hopeful that we can have smarter spending cuts that make a bigger difference on debt reduction, and we’ll see if we can do that.”
 
Bernie Becker contributed.