Eight months after President Obama ratified the last-minute Budget Control Act to avert a federal default, the budget deficit has only grown and the control is hard to see.
Last year’s supercommittee, set up by the BCA, failed to produce an agreement, and this year both parties accuse each other of voting to change the numbers in the agreement: in the case of the Senate, to accumulate more debt, while in the House the vote was to spend less on the annual appropriations bills than the caps called for under the deal.
“It’s been wounded substantially. Our members just pretty much are in denial,” said Sen. Jeff Sessions of Alabama, the ranking Republican on the Senate Budget Committee, who fought against his chamber’s votes to take on additional debt.
Moreover, the biggest test is still to come at the end of this year, when Congress and the president will have to grapple with the automatic defense and Medicare cuts they set in place as a punishment for the supercommittee’s failure.
Still, that test, which will come at the same time Congress will be faced with the expiring 2001 and 2003 tax cuts, can also be an opportunity for compromise, which is what the BCA was all about, said Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee.
“This is a major action-forcing event,” Mr. Van Hollen said. “I’m not saying there will be a grand bargain during the lame-duck session but I would certainly hope that we reach some way to sort-of structure [or] at the very least create a process in which a credible balanced deficit reduction plan can be reached.”
BCA was the result of the last crisis point, which came last summer as the government was running up against its borrowing limit. The deal allowed Mr. Obama to raise the debt ceiling in exchange for agreeing to limits on future spending and debt.
Those limits, set for every year of the next decade, apply chiefly to discretionary spending — the dozen annual appropriations bills that fund everything from education and national parks to defense and medical research. Entitlement spending, which relies on formulas and is essentially on autopilot, was largely spared, though the sequesters could end up cutting into Medicare.
The supercommittee, another creation of the BCA, also failed. The BCA did succeed in controlling 2012 discretionary spending, however, notching one early success.
Now Congress is working on the 2013 spending bills, and the process has broken down.
Senators have agreed on a bipartisan basis to write their bills to the $1.047 trillion cap set by BCA. But House Republicans voted to come in nearly $20 billion less than the cap — a move Mr. Van Hollen says violates the spirit of the BCA.
“The House Republicans have created an unnecessary fight there. It’s a fight where they’re clearly changing the terms of the Budget Control Act,” he said. “One of the reasons a lot of us gave for supporting the Budget Control Act is even for our members that do not like the levels that were set, it provides some predictability.”
The Republicans counter that the numbers in the BCA were an upper limit, not an exact target, and said Congress should always shoot for less.
The fight will come to a head this fall, when the two chambers try to reconcile their 12 annual spending bills.
Meanwhile, some Republicans say the Senate broke the BCA when it voted to waive budget rules on both the highway-building bill and on last month’s U.S. Postal Service overhaul.