Congress Moves Past Obama to Reach Budget Deal

House Republicans waited until the middle of the Republican presidential debate to announce details of their agreement with Democrats on the year-end $1.6 trillion spending and tax package.

The deal, which will fund the government through next year and make several tax credits permanent, contained a scattering of policy wins for Republicans, protections for many key Democrat priorities and confirmation that President Obama is largely irrelevant on Capitol Hill.

In terms of process, Congress will pass another stop-gap spending bill to fund the government until December 22, while the final spending package winds its way through Congress. Because the full text of the proposals weren’t released fully until 1am Wednesday, the House won’t begin its votes on the agreement until Friday. Speaker Ryan is trying to honor at least the spirit of the legislative rule that text is available for three days before votes are taken.

There are several specific provisions that warrant attention, but the overall impression of the deal is of a negotiated truce, with each side consolidating some minor victories while pushing major debates into the future. As with any temporary truce, no one is particularly happy with the result.

“I’m not real happy with the omnibus,” House Education Chair John Kline said about the deal.

But if you’re going to move forward and follow Speaker Ryan’s notion that we’re going to move on the offense this year and go back to regular order and pass all the appropriations bills then I think many of my colleagues will look at it like I do, that we need to move past this, get this done. Let’s put 2015 behind us and get onto 2016.

It is possible that this deal closes a sad legacy of the Obama presidency. In the early days of Obama’s tenure, Democrats, with complete control of Congress, inaugurated a budget process which relied on yearly continuing resolutions on spending, rather than work, and votes, on a traditional budget. This created an annual government shutdown threat, as Democrats, particularly in the Senate, sought to avoid politically tough votes on spending.

Republicans were forced to continue this process as the Obama Administration largely refused to compromise on any spending measures. If Speaker Ryan follows through on his promise to return to a regular budget process, giant 2,000 page omnibus spending bills like the one currently under consideration could become less frequent.

The second major take-away of the budget deal is how comprehensively Republicans and Democrats on the Hill cooperated to gut ObamaCare. One major policy victory for Republicans was a delay in the so-called “Cadillac Tax” on employer health benefit plans, a major funding source for the health law. The delay was only achieved, however, because it was a major priority of Minority Leader Sen. Harry Reid and other labor-backed Democrats.

Unions, which have very rich health insurance benefits, have long opposed ObamaCare’s tax on benefits. Without the funds from the tax, subsidies to purchase ObamaCare policies likely will be greatly reduced. This will likely create an insurance “death spiral” where premiums rise higher as fewer people can afford to purchase policies, pushing premiums even further higher.

The deal also delays a widely unpopular tax on medical devices. The White House cannot help but notice how enthusiastically Democrats agreed to roll back these critical funding sources for Obama’s signature health care law. It suggests the law is unlikely to survive as currently implemented once Obama exits the White House.

It is also noteworthy, though, that the delay of the ObamaCare taxes, arguably the most significant “wins” for conservatives, were only possible because rank-and-file Democrats wanted the delays. If Democrats had objected in any way to the ObamaCare tax delays, they likely wouldn’t have been included in the omnibus deal.

Which is the final, most troubling, impression of the omnibus deal. It is essentially the most conservative spending deal that Democrats would agree to pass. Despite being in the minority, Democrats were able to exert maximum influence on the details of the spending agreement. The overall spending levels in the deal burst through the spending caps enacted in the budget agreement when Republicans first took control of the House.

On specific policies, Republicans only won agreement on measures they were able to pair with significant concessions to Democrats. The GOP, for example, won a long-sought measure to allow oil to be sold for export, but only in exchange for extending several large tax subsidies for wind and solar power.

Republicans were able to make several business friendly tax credits permanent, but only by extending several budget-busting tax provisions popular with Democrats. Republicans extended several refundable tax credits that were boosted as part of the original stimulus bill in 2009. It is unlikely these temporary hikes in spending will ever be rolled back. Worse, Republicans failed in blocking illegal immigrants from accessing these refundable tax credits.

Illegal immigrants, and other ineligible workers, received $4 billion in these tax credits in 2010. Republicans largely abandoned efforts to block these unwarranted benefits.

Republicans also failed to secure any policy changes where Democrats expressed any opposition. The deal failed to curtail or reform Obama’s refugee resettlement program, block his executive orders extending amnesty, roll back his plans to issue hundreds of thousands of new green cards to immigrants from the Middle East nor roll back any funding for Planned Parenthood.

Republicans also failed to enact any checks on federal agencies, allowing the Obama Administration to continue pursuing sweeping regulatory changes, including even the National Labor Relations Board ruling to fundamentally change the employer-employee relationship on behalf of labor unions.

Passage of the spending bill will rely significantly on Democrat votes. The tax provisions, included in a separate bill, will pass largely with Republican votes. Democrats have largely succeeded in protecting their priorities, while also separating themselves from Obama. It is telling that the most significant challenge to ObamaCare, the delay of the Cadillac Tax, was orchestrated by Democrats, not Republicans.

The Republicans, again, jettisoned any policy that risked a Democrat revolt and a potential government shutdown. The party in DC is consumed with the myth that it politically suffers if the government temporarily runs out of spending authority. This myth has been betrayed by every political measurement except the emotional temperament of Republican leaders.

Republicans may have majorities in Congress, but they won’t use it as long as Democrats can threaten a government shutdown. Other than continuing to spend money the nation doesn’t have, the latest Republican budget agreement isn’t completely horrible. Its disappointment is in what it failed to do. Or, rather, the exhaustive list of all the many things it failed to do.