With the clock ticking toward a Dec. 13 deadline to report to Congress, the bipartisan conference committee led by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., is weighing a plan that would set spending levels for fiscal 2014 and 2015.
The goal is to avoid a train wreck like the one that caused the 16-day partial government shutdown in October. The shutdown ended when lawmakers agreed to a stopgap measure to fund the government for three months. That funding measure expires Jan. 15, the same day that $109.3 billion in sequestration cuts are due to kick in.
Those close to the talks caution that nothing is final yet -- and everything could blow apart at any moment.
But so far, there's cautious optimism. Negotiators are considering a 2014 budget for discretionary items -- those under Congress' control -- that would spend at an annual rate of about $1 trillion, more than the $967 billion that conservative Republicans want but less than the $1.058 trillion Senate Democrats endorsed.
The budget leaders are crafting a plan to soften the blow of sequestration's across-the-board spending cuts by finding savings in other areas of the budget and by generating revenue through increasing some user fees. The federal government attaches these small fees on things that range from airline tickets to national parks usage.
That would allow the two parties to claim that their sacred cows were untouched: Democrats who balk at cuts to entitlement programs such as Social Security and Republicans who won't accept tax increases.
They do generally agree that they want to spend more than the sequester would allow. Many in Congress maintain that the cuts are harming military preparedness and social programs.
"Chairman Ryan and I continue to talk, and I am hopeful that we can keep making progress and reach a bipartisan agreement," Murray said Wednesday. "I know that families in Washington state and across the country are looking to us to get something done to address the cuts from sequestration that are impacting the workers and communities around our military base, as well as critical investments in education, jobs, economic growth and medical research."
Rep. Chris Van Hollen of Maryland, a conferee who's also the ranking Democrat on the House Budget Committee, placed the odds of reaching a deal at 50-50.
"It's a jump ball," Van Hollen said Tuesday. "It could go either way."
"Everything is very fluid right now," agreed Rep. Tom Cole, R-Okla., the chairman of the House Appropriations Subcommittee on the Legislative Branch.
One roadblock: Congressional conservatives and their allies may balk at raising user fees, calling it a tax increase in disguise.
"It's pretty close to a gimmick as opposed to real revenue enhancers," said Steve Ellis, the vice president of Taxpayers for Common Sense. "They're just looking around for an easy way out that doesn't exist. If Friday the 13th comes and goes, it won't surprise me."
Veteran budget expert Steve Bell, a former chief of staff for the Senate Budget Committee, expects the bicameral talks to fail.
"Anything can happen," said Bell, a senior director at the Bipartisan Policy Center, a research organization. A key question, he said, is whether incumbents in the House of Representatives think it's better politically if they reach a deal or continue to clash over spending.
Cole, who's an adviser to House Speaker John Boehner, R-Ohio, countered that if the principal negotiators agree on a plan, so will most lawmakers.
"My assumption is if a Republican House and Democratic Senate can come to a deal, there will be enough votes in the House and Senate to get us there," he said.
Ryan was the party's 2012 vice presidential candidate, and conservatives regard him highly. Murray is part of the Senate Democratic leadership and is respected by the party's liberal wing.
As a fail-safe measure, House Republican leaders reportedly are preparing a short-term "continuing resolution" to keep the federal government operating beyond Jan. 15 at a $967 billion sequester-level spending cap urged by Republicans. The bill might be voted on as early as next week.
But even that measure might prove problematic, because Democrats would want stopgap spending above $967 billion to help blunt the looming sequestration cuts.
In October, House Democrats unanimously voted for a continuing resolution that ended the partial shutdown at the 2013 level of $986 billion, which included sequestration cuts. Many of them did so thinking that the three months would give Congress time to come up with a sequestration solution. That hasn't happened.
"I'm not going to support a short-term CR that leads to a 967 level," House Minority Whip Steny Hoyer, D-Md., said Tuesday. "I believe that hurts our national security, it hurts our economy and it undermines our responsibility of running government at a level that is productive for our people."
If a deal is reached, the procedural path forward is uncertain. The House is expected to end its year Dec. 13, while the Senate is likely to stay in Washington until Dec. 20.
The two chambers might pass general budget guidelines this month, and then the appropriations committees would write more detailed legislation outlining how the money would be spent.
That would seem like a gargantuan task to finish in a month - since the House has passed only four of the 12 appropriations bills so far this year and the Senate has passed none.
Yet House Appropriations Committee Chairman Hal Rogers, R-Ky., was optimistic that it could be done by Jan. 15.
The mood has changed, he maintained. "I believe we can do a bill," he said.
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