Budget Disagreements of $50 Billion May be Bridged by Boehner-Reid Rapport

Prospects for settling the U.S. budget battle hinge in part on the fledgling relationship between House Speaker John Boehner and Senate Majority Leader Harry Reid.

With the House and Senate about $50 billion apart on how much funding to cut this fiscal year, talks to reach an accord and avert a government shutdown are being conducted by the two lawmakers who until this year had few dealings with one another. Other congressional leaders say that along with the White House, it’s largely up to Boehner, an Ohio Republican, and Reid, a Nevada Democrat, to resolve the dispute.

“They’re practical people, which helps,” said Jon Kyl of Arizona, the Senate’s No. 2 Republican. “They’re both good at understanding what their limitations are, in terms of the people they represent. Both have their challenges, and they’re both a little bit different. But they’re both up to it, and will get it done because it has to get done.”

The Republican-led House last month approved cutting government spending by $61 billion through Sept. 30, which would kill more than 100 programs and reduce hundreds more. The Democratic-led Senate has gone along with about $10 billion in cuts. An April 8 deadline, when current federal funding ends, looms over current negotiations for splitting the difference. And the talks’ outcome likely will affect prospects for future compromises, including an approaching Obama administration request for increasing the $14.3 trillion debt limit.

Pragmatists

Many lawmakers say Reid and Boehner are pragmatists who embrace the importance of Congress getting its work done.

“It’s likely they will come to terms and cooperate because they are both institutionalists,” said Representative Rob Andrews, a New Jersey Democrat.

Before January, when Boehner became speaker, interaction between the two was “less than occasional,” and came mostly in group meetings, said Boehner spokesman Kevin Smith. Now, they speak frequently by telephone and have met directly three times.

Representative Tom Latham, an Iowa Republican who often dines with Boehner, said the speaker and Reid are developing “a very good personal relationship. They talk on a regular basis.”

With Congress on a week-long recess, top aides for the two are conducting talks over differences that include the House’s bid to retain policy directives in a budget bill, such as banning funds for last year’s health-care overhaul.

Reid is relying on his chief of staff, former Comcast Corp. senior vice president David Krone. Representing Boehner is his chief of staff, Barry Jackson, who also was an adviser to President George W. Bush. Both helped hash out two stopgap spending measures passed earlier this month that contained the $10 billion in cuts the Senate accepted.

Trading Barbs

Boehner and Reid, who both declined to be interviewed, have largely refrained from personal attacks during the budget battle, often leaving it to lieutenants such as Senator Charles Schumer, a New York Democrat, and House Majority Leader Eric Cantor, a Virginia Republican, to trade barbs.

Boehner last week turned to Democrats to help pass the second stopgap measure, which 54 Republicans opposed. He told reporters “it’s never been lost on me” that he will have to work for a bipartisan deal.

Reid praised that approach, telling reporters on March 17 he wanted to “hand a bouquet to Speaker Boehner” for reaching out to Democrats.

Although the two differ over the benefits of government spending to address problems, there is common ground.

Amending Bills

Both have opened up the legislative process in their chambers. Boehner allowed hundreds of amendments to the measure cutting $61 billion in spending, while Reid in January struck a “gentleman’s agreement” that resulted in Senate Republicans getting more chances to alter bills.

Both are self-made men. Boehner, 61, speaks often of a youth spent sweeping out his father’s bar and sharing a home with 11 siblings. Reid, 71, was raised in a Nevada mining town by an alcoholic father and a mother who took in laundry from brothels.

They also have track records of compromising. Reid has worked with Republicans on issues that include 2008’s $700 billion financial bailout and legislation last December extending Bush-era tax cuts.

Pension Bill

Boehner in 2006 joined forces with Representative John Dingell, a Michigan Democrat, and Senate Finance Committee Chairman Max Baucus, a Montana Democrat, on a pension-law overhaul. In 2001, he and Representative George Miller, a California Democrat, helped usher into law the No Child Left Behind education measure.

“He’s fully up to the task” of negotiating a budget deal with Reid, Miller said.

In the debate, both leaders have been pushed further apart by their rank and file. Boehner initially backed spending cuts of $31 billion, then boosted that to $61 billion after an uprising from Republicans, including dozens backed by Tea Party activists in last year’s elections.

Reid responded to discontent from other Democrats by saying a budget agreement should include revenue enhancements, such as ending tax breaks for oil and gas companies.

“Anything that will come out” of negotiations “will have substantial opposition from their very different constituencies,” said Ross Baker, a political science professor at Rutgers University in New Brunswick, New Jersey.

Lawmakers say Boehner appears to be in the toughest spot, because a bloc of fiscally conservative House Republicans will balk at anything less than the $61 billion spending cut. Still, they say he can probably win over most House Republicans and turn again to some Democrats to pass a budget bill.

“His aim is pretty clear: He wants to reduce spending as far as he can,” said Representative Tom Cole, an Oklahoma Republican. “When he thinks he’s gotten to that point, he’ll strike the deal. He can deliver most of the caucus; might not be able to deliver everybody.”

To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net; James Rowley

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

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