Where the Conference is Starting From
The first official meeting of the conference committee is expected to occur sometime next week, at which point the conferees will begin attempting to reconcile the Senate and House budget proposals. Both budgets were passed with largely partisan support, so both Democrats and Republicans will need to look toward compromises over the next two months.
The good news is that the first point of agreement appears to be putting debt on a downward path as a share of the economy. Both the House and Senate budget proposals achieved this mark, though they go about this in markedly different ways. However, the House and Senate budgets used different baselines, so earlier in the year, we developed the comparison table below in order to measure savings from a consistent standard.
Against our CRFB Realistic Baseline, the House budget retains sequestration and calls for $2.7 trillion in health savings, $960 billion in other mandatory savings, and $250 billion in further discretionary savings, with $165 billion in revenue from letting the 2009 refundable tax credit expansions expire. On the other hand, the Senate budget would cancel sequestration and calls for $275 billion in health savings, $75 billion in other mandatory, and $380 billion in additional discretionary savings, with $810 billion in revenue. Not surprisingly, revenues and health care appear to be the main points of contention.
Finding compromise between the two budgets will be difficult, but we've seen in past negotiations that the parties may be closer to an agreement than might first appear. Hopefully, the conferees can capitalize on this opportunity.