The EU Monitor enables its users to keep track of the European process of lawmaking, focusing on the relevant dossiers.
It automatically signals the newly added documents and subsequent meetings in which these are scheduled for discussion or vote. The latest state of affairs is conveniently presented in such a way that a single glance is sufficient to keep informed. Please note This page contains a limited version of this dossier in the EU Monitor. Republicans often emphasize that Medicare premium support would encourage choice and competition.
Democrats assert that taxing the rich can reduce inequality and that cutting defense may lead to a more modest foreign policy. The welfare reforms were promoted as a way to end the cycle of poverty, rather than as a budget-saving exercise.
Indeed, the collapse of trust and relationships is perhaps the most important factor in the lack of successful bipartisan deals over the past 20 years. There are two elements to this ingredient. The first is both sides entering the negotiation in good faith by:.
The second element is utilizing an integrative negotiating strategy—whereby both sides work together to build a win-win deal—rather than a pure distributive negotiation where both sides begin with extreme positions and then try to bargain the other down , or a negotiation based on deceptive or hardball tactics.
Elements of integrative negotiations include:. A certain degree of hardball tactics and deception is inevitable in all negotiations and may provide limited benefits to the side employing them , but a heavy reliance on them will often destroy the negotiations. Political scientists and social psychologists agree that building the necessary trust for good-faith negotiations usually requires repeated interactions—both personal and professional.
Thus, Presidents Reagan and George H. Bush spent considerable time inviting congressional Democrats to the White House for social events as well as calling them to learn their policy concerns President Clinton reached out to Republicans later in his presidency as well.
Finally, this is why seniority especially on committees is so important in successful negotiations. I felt very comfortable in talking with him about any matter related to the agreement.
Honestly, I think that did help and made a difference for everyone. Bill Frenzel R. Yes, we had some distrust, but also we had some ability to work with each other, believe each other, and [that] made life easier at that time. Some budget negotiations have seen participants make additional concessions for the sake of unity.
The Social Security commission probably had the votes to pass a party-line conservative solution on day one if they had wanted—but they continued negotiation and making concessions to win a bipartisan supermajority vote.
Former high-ranking Rep. Henry Waxman D. Tom Bliley R. The two lawmakers and their staffs engaged in numerous meetings where they listed their various priorities, sought win-win solutions, and helped each other satisfy their policy needs.
Their legislation passed Congress unanimously and was signed into law. The Clean Air Act provides another example of a successful integrative solution.
The discussions there were based on efforts by key leaders to find mutually acceptable solutions that were right for them in accordance with [the] view that politicians have much to gain by seeking common ground and sharing credit for measures that are in their mutual interest to support. Unlike the usual participants in negotiations—rigid committees, congressional leadership, and White House officials—gangs are self-selecting and private.
This makes them more likely to trust one another and safeguard the privacy of negotiations. While the primary ingredients create substantial momentum for a deficit-reduction deal, secondary ingredients can also push Congress and the White House toward a deal:. Several budget deals over the past several decades have been heavily assisted, or nearly destroyed, by the decision of who is in the room doing the negotiating.
All successful bipartisan deals except one—the Gramm-Rudman-Hollings law—began with private negotiations or commissions involving the White House and the congressional leaders of both parties.
Presidential leadership has been vital to all major deals, with the exception of the Gramm-Rudman-Hollings Act, which began as a popular amendment to a debt-limit bill. However, while White House leadership is extremely important, some dispute whether the president should be in the room negotiating the final deal. Hilley adds that the earlier budget negotiations failed partly because Clinton was too directly engaged in the discussions. President Obama also directly led the detailed negotiations with congressional Republicans during the failed grand-deal negotiations although he was able to negotiate the smaller Budget Control Act.
Additionally, Reagan and George H. A perennial challenge has been the trade-off between building a large group of negotiators that ensures that all interests are represented, versus having a smaller group that is more likely to build a consensus.
In the budget deal, Bush originally hosted a group of approximately two dozen at Andrews Air Force Base for 11 days to negotiate in private. Progress was made, yet the deal was sealed when a smaller group of eight top White House and congressional leaders met in the office of House Speaker Foley for several days after the Andrews negotiations broke up.
The budget deal was negotiated by a small group of administration and congressional leaders who were open to compromise. These examples suggest that a smaller group of six to nine negotiators is optimal. The problem is that limiting the number of congressional leaders at the table increases the pressure on those leaders to adequately represent the diverse factions of their conference. However, successful leaders must inspire loyal followers.
Ultimately, a successful budget negotiation should consist of two negotiating factions, rather than several partisan sub-factions. This requires a minimum degree of party consensus before entering negotiations. The president and congressional leaders must also be able to deliver their rank-and-file lawmakers. Two successful models have emerged. The and model begins with a larger group of negotiators 15—22 that includes the key administration aides, congressional leadership, relevant committee chairpersons, and top staff.
Once the larger group has moved toward a general framework, they shrink the room to six to nine top congressional and administration leaders to finish the deal. Still, this approach is not perfect—by isolating the 22 members at Andrews Air Force Base, rank-and-file Republicans still felt left out, and ultimately voted against the deal.
The other model, from , is to begin with a relatively small group of negotiators who also maintain contact with relevant factions and committee leaders—even cycling them into the negotiations when their issues of jurisdiction were addressed. The choice of administration negotiators matters as well. In the chaotic negotiations, both Republican and Democratic members of Congress complained that Obama and his top negotiators were rarely on the same page, leading to repeatedly contradictory negotiating positions.
Even a bipartisan agreement on an optimal set of policy reforms does not guarantee that the public or influential interest groups will support the deal. The president and congressional leaders may have the wind at their back when announcing a bipartisan agreement, but they still need to sell it to the rest of Congress and the voters.
An obvious tactic is to emphasize the bipartisan nature of the deal. In the budget agreement, President Clinton made sure to include Republican leaders at the Rose Garden ceremony announcing the deal. The Social Security pact between Clinton and House Speaker Gingrich would have been rolled out in a series of coordinated speeches, commissions, and events had it not collapsed because of the Lewinsky scandal. In and , the White House and congressional leaders coordinated communications and pledged to work together knocking down political obstacles.
Addressing skeptical interest groups is trickier. The Social Security reforms reportedly enraged AARP—yet the parties simply chose to ignore the organization, whose own preference for a general revenue bailout was seen by negotiators as a wild overreach. Past deals that capped defense spending, reduced payments to health providers, and raised user fees had too much bipartisan momentum for the affected interests to block.
One approach is to bring the most important outside stakeholders into the process. Including them as part of a bipartisan commission to solve the problem alongside lawmakers can give these stakeholders a voice and an investment in seeing the problem solved.
At minimum, keeping in close consultation during the policy process can build support from outside organizations that are acting in good faith. An agreement on the scope of the problem, the data, and a reliance on neutral experts. One common aspect of failed negotiations is that neither side may agree on the exact nature of the problem to be solved, and both sides may bring their own contradictory experts and data. During the Obama—Boehner negotiations, both sides also brought wildly divergent analyses of the budgetary savings and effects of various proposals.
Creating a bipartisan commission has been shown to address these issues. The Social Security commission was professionally staffed with technical experts who drafted a long series of memos explaining the scope of the problem and the savings and ramifications of various proposals. It is just a matter of negotiators agreeing on a group of experts, bringing them in, and accepting their expertise. A bipartisan deficit-reduction commission can serve several purposes. First, it can break the partisan logjam and focus both parties on finding a solution.
For example, after a year of partisan warfare over the soon-to-be insolvent Social Security system, Reagan in late created a bipartisan Social Security commission that brought Republicans, Democrats, and outside experts together to define the policy challenge, focus on solutions, and craft reform options.
Although the deal was finalized outside the official commission negotiations, the creation of a commission made those civil, bipartisan negotiations possible. Second, a commission can bring bipartisan credibility to a deficit-reduction plan and thus encourage public support. The Simpson-Bowles commission gave some credibility to deficit-reduction efforts, even if the commission itself did not approve the final plan.
In the s and s, a defense-base-closing commission was able to build support in Congress for closing more than obsolete military bases—a solution that never could have occurred through regular congressional politics. A commission does not guarantee success, but it can break some of the partisan gridlock and get the ball rolling on reform. A commission is a tool, yet it cannot motivate a disinterested Congress. Second, a commission usually requires current members of Congress who have a direct stake in the politics.
Lawmakers will not give credibility to a group of only outside experts who have no political skin in the game. Third, commissions should reserve additional spots for respected former lawmakers and outside experts, as well as interest-group stakeholders whose support may ultimately be necessary for a deal.
While membership should include a diversity of opinion, it helps to include individuals who are capable of working across the aisle. Fourth, requiring a commission supermajority to approve the plan is wise because fiscal consolidation recommendations are unlikely to be approved by a partisan and polarized Congress unless they have successfully brought several diverse factions on board.
Finally, there should be some automatic mechanism to bring the approved commission recommendations to the House and Senate floor for a guaranteed vote, so that the report does not simply collect dust on a shelf.
Commissions have historically been more successful when used for discrete issues, such as Social Security solvency or closing military bases. Broader budget agreements usually require more direct congressional and White House involvement. Stuart Butler and Maya MacGuineas have proposed having a commission initiate the deficit-reduction planning and craft default proposals to meet the long-term budget targets, while also empowering Congress and the White House to replace those reforms with alternatives that can achieve equal savings.
It may be counterintuitive to observe that deficit-reduction deals are more likely to occur under divided government than unified control. As difficult as forging bipartisan agreement can be, unified party control of the White House, House, and Senate is even less likely to result in deficit-reduction legislation.
One reason is lack of interest. When one party has finally achieved the long-dreamed-of trifecta of the White House combined with a House and Senate majority, fiscal consolidations are often not on the priority list Democrats are an exception. Republicans typically seek to cut taxes and enact other popular parts of the conservative agenda.
Democrats typically aim to create and expand government programs and enact other popular parts of the Democratic agenda. Also, during the last two periods of unified government, the party in power focused on alleviating a national crisis the terrorist attacks for the —06 Republican trifecta[ 20 ] and the great recession for the —10 Democratic trifecta.
Unified government also fails to produce major bipartisan deals because the minority party sees little political benefit in helping the majority enact controversial policies. In that situation, the majority party may find it too risky to impose consolidations without the support of the minority party—and the minority party will see its aggressive opposition to these painful reforms as its key back into power.
At this point, any major deficit-reduction deal is much more likely to be enacted under divided government. The following 14 case studies constitute the largest grand-deal deficit negotiations since Six of them resulted in enacted legislation summarized in Figure 4 and Figure 5 , and eight did not. The vast majority of these case studies show that a large bipartisan deal requires at least two of the three primary ingredients described earlier.
The Social Security system was heading toward insolvency, and by summer it would be unable to pay full benefits. Ronald Reagan came into office in proposing his own solvency reforms mostly benefit savings ran into bipartisan opposition and were harshly attacked as a war on seniors. Reagan responded with a new approach: the creation of a member bipartisan commission in September , which was chaired by Alan Greenspan and included lawmakers and outside experts appointed by both parties.
The commission would report after the elections. Their solution—which funded a short-term fix and approximately two-thirds of the year long-term shortfall—was endorsed by the broader commission on a 12—3 vote.
Congress then tweaked and even expanded the reforms adding a future increase in the full retirement age from 65 to 67 , before it passed with bipartisan support and was signed by the president in April Future benefit savings would come from raising the full retirement age to In terms of the primary ingredients:.
Penalty Default? Unless reforms were enacted, the Social Security system would stop paying full benefits in summer Public Support? While the public understood that Social Security was facing a crunch that would render it unable to pay full benefits, most Americans still opposed the necessary reforms to save the system—even if the opposition was softer in than in previous years.
Healthy Negotiations? Leaks were minimized. Congress accepted most recommendations and even worked on a bipartisan basis to expand the savings. Bob Dole R. Ultimately, the Social Security reforms showed how both parties can collaborate on a controversial issue in a manner that hurts neither party politically. Result: With a penalty default and healthy negotiations, the result was the most ambitious entitlement reforms in more than three decades.
Amid public concern over rising deficits, the Democratic House and Republican Senate both wanted a deficit-reduction deal. Reagan had pledged to veto any tax increases, and Democrats seeking defense cuts took Social Security reform off the table.
After the negotiations within the regular budget process broke down, a bipartisan group of senators offered an amendment to a bill in September to increase the debt limit that would create annual and declining caps on the budget deficit, to be enforced by across-the-board spending cuts aka sequestration.
To the surprise of most, the Senate passed the proposal 75— Democrats were able to exempt most mandatory spending from any sequestration and require that defense cuts would constitute half of any sequestration. Republicans kept tax increases out of the automatic reforms and received assurance that sequestrations would not occur until after the elections. While neither side loved the compromise, it passed the House and Senate overwhelmingly and was signed by the president on December 12, the legislation as signed would be struck down by the Supreme Court.
In the final deal, yearly deficit-reduction targets spared both tax increases and major entitlement cuts. If Congress failed to stay within the targets, automatic across-the-board cuts sequestrations would take place—half from defense and the other half from nondefense discretionary spending plus a small portion of non-exempt entitlement spending.
Polls and lawmaker town halls showed that the public was increasingly concerned about rising deficits, which resulted in immediate legislative momentum for the proposal. The proposal originated with a bipartisan amendment to a bill. Congressional leaders who were skeptical decided that it would be more effective to shape the legislation—and remove what Democrats and Republicans separately regarded as its worst provisions—than to stand on the sidelines and vote no.
Both sides were able to exempt key priorities from the final provisions governing sequesters. Result: Public support and good-faith negotiations led to success. This was a rare bipartisan budget deal that began as regular legislation—rather than a commission or set of top-level negotiations—and gained momentum. In , the Supreme Court declared the law unconstitutional Bowsher v.
Synar, U. A tweaked and constitutional version of the law, Balanced Budget and Emergency Deficit Control Reaffirmation Act, was enacted in In , the mounting budget deficit again had the attention of both parties. An automatic sequestration was looming, the economy was weakening, and the Federal Reserve would not lower interest rates without a deficit-reduction deal.
Democrats had been drafting their own deficit-reduction plans when President George H. From September 7 through September 18, Bush, his aides, and a bipartisan group of approximately a dozen congressional leaders negotiated at Andrews Air Force Base. Despite pledging to work together to pass their budget deal through Congress, a Republican rebellion in the House defeated the plan. From there, negotiators moved the proposal leftward to win more Democratic support.
It passed Congress in late October, and the president signed the bill on November 5, The act also replaced the Gramm-Rudman-Hollings sequester with five years of discretionary spending caps and new, pay-as-you-go PAYGO rules, requiring that new tax cuts or entitlement expansions be offset. A spending sequestration was looming. Bush had threatened to veto a continuing resolution and shut down the government if no deal was struck by October 1.
The president also wanted to persuade the Federal Reserve to lower interest rates on a fragile economy. The public was generally worried about the rising deficit. Both parties feared a public backlash if they failed to complete a deal.
Bush had long invested significant effort into building personal relationships with Democratic leaders. The Andrews Air Force Base negotiations were generally collegial and suffered minimal leaks. Negotiators of both parties worked together to sell the deal to Congress and fight poison-pill amendments.
However, rank-and-file Republicans felt excluded by the private negotiations at Andrews and generally opposed the deal. Result: With all three primary ingredients secured, the bargain was sealed.
A rebellion of House Republicans against the bill ultimately led to more taxes, which was not their intention. After running for president on the promise of a middle-class tax cut, Bill Clinton quickly determined that rising deficits required both tax increases and spending cuts.
But exempting some programs and services from big cuts only means that whatever else is remaining will have to be cut even further. More than 98 percent of those costs go out in the form of benefits to retirees, the disabled, and their families. This would be unfair, not to mention politically impossible, since current and soon-to-be beneficiaries have acted in reliance on the Social Security program as it is currently structured.
These realities are why, though several proposals exist to reduce future Social Security costs, very few appreciably affect benefits in the near or medium terms. The simple fact is that significant reductions in Social Security spending for are just not going to happen.
But if Social Security cuts will not contribute significantly in , then the rest of the federal budget would have to be reduced by 9 percent to achieve primary balance. Another category of federal spending that will probably be exempt from significant cuts in —beyond what was recently enacted in the comprehensive health reform bill—is health care expenditures, specifically Medicare and Medicaid. The bill incorporated a raft of cost containment measures, most of which were scored conservatively by the Congressional Budget Office.
The likelihood of squeezing any substantial further savings without seriously undermining the quality of the health care provided—beyond what health reform has already put into motion—is very small.
Taking health care off the table beyond current projected savings, the rest of the budget would have to be cut by 14 percent to get to primary balance. And cuts to unemployment or promised federal employee and military retirement benefits are also quite unlikely. If those are off the chopping block then all remaining spending would face a 16 percent reduction to get to primary balance. The largest remaining single spending category is defense.
Similarly, during the negotiations and consideration of the budget agreement, Congress approved six temporary increases in the debt limit before approving a long-term increase as part of the reconciliation bill implementing the deficit reduction agreement. The Appendix contains further discussion of provisions attached to debt ceiling legislation, including bills in , , , , , and Policymakers should work promptly to raise or suspend the debt ceiling. Failing to raise the debt ceiling would be disastrous.
It would result in severe negative consequences that experts are not capable of predicting in advance. Even threatening a default or taking the country to the brink of default could have serious implications.
Importantly, though, failing to control the national debt would also have negative consequences; rising debt could ultimately stunt economic growth, reduce fiscal flexibility, and increase the cost burden on future generations. Thus, lawmakers should consider accompanying a debt ceiling increase with measures to begin addressing the debt. To be sure, political advantage should not be sought by threatening default, and the debt ceiling must be raised or suspended as soon as possible.
Lawmakers must not jeopardize the full faith and credit of the U. Increasing the debt ceiling requires frequent and often contentious legislative action. While a number of increases have been used to enact fiscal reforms, many increases are not necessarily tied to fiscal health.
For instance, debates regarding the debt ceiling often take place after the policies producing the debt have already been put in place. The debt ceiling also measures gross debt, which means that even if the budget was balanced, the debt ceiling would still have to be raised if surpluses accumulated in government trust funds like Social Security.
In The Better Budget Process Initiative: Improving the Debt Limit and subsequent publications , we have suggested reforms to the debt ceiling, grouped in four major categories:.
Although the deficit reduction goals under GRH were not fully achieved, the experience gained under the act contributed to the development of more workable and effective procedures five years later. Like its predecessor, GRH II attached a deficit reduction measure to the increased debt limit, requiring automatic sequester if deficits did not meet annual targets. Additionally, it created enforcement procedures in the Budget Enforcement Act BEA , which helped lead to budget surpluses in the late s.
The BEA also created adjustable limits for separate categories of discretionary spending and the pay-as-you-go PAYGO procedure that required tax cuts or increases in mandatory spending to be offset. Congress approved six temporary increases in the debt limit while negotiations to implement the budget agreement were ongoing.
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