Wait — what just happened?
Somehow, the White House and congressional partisans just crafted a budget deal that actually looks pretty good.
A deal that provides significant relief from the boneheaded sequestration caps to the tune of $80 billion over the next two years, with parity on the defense and non-defense sides of the budget.
A deal that staves off governing by crisis with fiscal cliffs and debt ceilings and shutdowns for a couple of years — that’s “years,” not “weeks” (e.g., the debt limit is raised until early 2017) — and that does so without dinging Medicare or Social Security beneficiaries.
A deal that ensures the ability of Social Security Disability Insurance to not only stave off a 20 percent cut that would have hit next year but to pay full benefits through 2022; that prevents a huge increase in Medicare deductibles and premiums faced by almost a third of Medicare recipients.
What about “payfors?”
The deal taps a time-shifting technique that’s been used before, replacing some sequestration cuts now and claiming them back in a later year.
A touch squirrelly, perhaps, but since those cuts are ill-conceived in the first place, pushing them into the future at least raises the possibility that we can figure out how to get rid of them forever.
There’s also a tax measure, described by House Democrats as “$11 billion in revenues from tax compliance, mostly from significant reforms to improve tax compliance among investors in hedge funds, private equity funds and other large partnerships.”
My Center on Budget colleagues describe one payfor that isn’t so great: the repeal of an Affordable Care Act provision designed to increase enrollment in health plans offered by large firms.
The measure had yet to be implemented, but the result of the repeal will mean fewer people with employer-sponsored coverage. That saves some money that they'll use for this deal.
Yes, it’s robbing Peter of his health coverage to provide Paul with an offset, but this was to be a relatively minor piece of the ACA.
All told, it’s a solid deal that should mean significantly less budget madness for a couple of years while protecting key provisions in Medicare and Social Security Disability Insurance.
I should have mentioned this before, but it’s not a done deal.
It looks like the votes will be there — obviously, departing House Speaker John Boehner, R-Ohio, will have no compunction against using the votes of House Democrats to get the deal over the goal line, so I’d say the odds are above 50 percent.
As The Washington Post reports, House Minority Leader Nancy Pelosi, D-Calif., “embraced the agreement Tuesday morning, signaling that the 188 House Democrats could provide a large portion of the vote needed to get a majority vote in the House.”
So how did this come to pass all of the sudden? Did the partisan fever break?
Nope. It’s just the confluence of debt-limit timing and Boehner’s decision to “clean the barn” before he leaves at the end of this month.
This led to an alignment of the stars wherein Republican moderates worked with congressional Democrats and the White House to put together a plan acceptable to both sides. The hard right will surely squawk, but they may not be able to stop it.
The stars will soon go back to their previous alignment, but hopefully we'll have a decent budget plan in place by then.
Jared Bernstein, a former chief economist to Vice President Joe Biden, is a senior fellow at the Center on Budget and Policy Priorities.