WASHINGTON — Arkansas lawmakers were mostly noncommittal Wednesday about how they plan to vote on a deal that would avert a new congressional budget showdown in January.
The proposal would nullify about $63 billion in across-the-board sequestration cuts over the next two years. The cuts would be made up for through a combination of other budget savings and fee hikes estimated to be worth $85 billion over 10 years — allowing for an additional $23 billion reduction in the deficit.
Announcing the deal Tuesday, Sen. Patty Murray, D-Wash., chairman of the Senate Budget Committee, and her House counterpart, Rep. Paul Ryan, R-Wis., said it would also bring some normalcy back to the budget process.
“This agreement breaks through the recent dysfunction to prevent another government shutdown,” said Murray.
A budget impasse doomed agreement on a budget extension past the Sept. 30 end of the federal fiscal year. The government shutdown began Oct. 1 after Congress failed to agree to legislation needed to keep discretionary programs funded in the new fiscal year. The 16-day shutdown cost the U.S. economy about $24 billion, according to Beth Ann Bovino, an economist at Standard & Poor’s.
The House is scheduled to vote on the proposed new budget resolution Thursday, with the Senate to follow.
Rep. Rick Crawford, R-Jonesboro, indicated in a statement that he will not support the resolution.
“Absent some form of permanent spending control, a non-binding budget resolution will only allow for future Congresses to circumvent statutory spending caps when they so desire,” he said.
Other Arkansas lawmakers contacted Wednesday said they had not decided whether to support the resolution. They were still reviewing the details.
Rep. Tim Griffin, R-Little Rock, said he expects it will be approved but he is leery of agreeing to increased spending now in exchange for spending cuts in the future. Still, he said, it may be the only realistic option available that would avoid the potential for a government shutdown in January.
“Out of the box I was disappointed. A lot of deals where they call for changes in the short term that are supposed to be funded in the long term are problematic because you can never tell what a future Congress is going to do,” Griffin said.
In this case, however, Griffin said that it is more likely the future cuts will remain because they are being made to mandatory spending programs that typically fall outside the annual budget process.
“I want to know more details. The issue for me is one of being confident these are the types of reforms that will stay in place,” he said.
The proposed savings over the next decade include:
—$12.6 billion in higher security fees for airline passengers.
—$12 billion reduction in contributions to federal pensions.
—$7.9 billion in higher federal insurance premiums for private pensions.
—$6 billion in reduced payments to student-loan debt collectors.
—$3 billion by not fully refilling strategic petroleum reserves.
—$21.5 billion in other fees and spending cuts that include a small reduction in cost-of-living increases for military retires, caps on contractor salaries and reducing Social Security fraud.
Spokesmen for Reps. Steve Womack, R-Rogers, and Tom Cotton, R-Dardanelle, and Sens. Mark Pryor, D-Ark., and John Boozman, R-Ark., said Wednesday that the budget resolution was still under review.
Boozman’s staff indicated he has some concerns about raising the cap on discretionary spending beyond the $967 billion level for 2014 set under a previous budget agreement. The new proposal would raise the cap to $1.012 trillion.
While Arkansas lawmakers are hesitant to comment on the budget deal, others are weighing in early.
President Obama called it a “good first step” toward a balanced budget approach that will help the economy grow.
“This agreement doesn’t include everything I’d like,” he said. “But it’s a good sign that Democrats and Republicans in Congress were able to come together and break the cycle of short-sighted, crisis-driven decision-making to get this done.”
The Business Roundtable also sounded a positive note.
“The agreement provides a foundation for tackling issues critical to U.S. economic growth, as well as providing predictability and certainty for federal government funding for two fiscal years,” said United Technologies CEO Louis Chenevert, who chairs the Business Roundtable’s tax and fiscal policy committee.
Many fiscal conservatives expressed disappointment with the deal and are urging lawmakers to reject it.
“Apparently, there are some Republicans who don’t have the stomach for even relatively small spending reductions that are devoid of budgetary smoke and mirrors,” said Club for Growth President Chris Chocola. He said Republicans should reject the deal and stick with the guaranteed sequestration cuts.
“Americans deserve better than a compromise that continues excessive spending, adding fees in lieu of taxes,” said Amy Kremer, chairman of Tea Party Express.
Griffin said he believes Ryan struck a realistic deal given that Democrats control the Senate and White House.
“My question is what is the alternative? We don’t have the votes to pass some of the things they (fiscal conservatives) want to pass,” he said.