Fiscal Cliff Blog Day 2, Charting Defense Related Developments as Lawmakers Seek Deal

Blog posted in for Defense News Service, By John T. Bennett

The House and Senate are again in session today (Monday, Dec. 31), and Defense News is again camped out on Capitol Hill to try and make sense of efforts to avoid the dreaded fiscal cliff and, possibly, the $500 billion in Pentagon budget cuts set to kick in on Jan. 2.

Sources and reports indicate Vice President Joe Biden. and Minority Leader Mitch McConnell, R-Kent., are pursuing a bipartisan deal that would extend most set-to-expire tax cuts for all Americans save an unknown amount of top earners. Senate Majority Leader Harry Reid, D-Nev., is now only a secondary negotiator. It still remains unclear whether the sequestration cuts to planned Defense Department spending — and an equal amount of domestic cuts that also are set to take effect Jan. 2 — would be voided, offset, or delayed by the not-yet-finalized plan.

Below is our live blog of defense-related developments. We hope you will share the link with others, and check DefenseNews.com for full coverage.

2:50 p.m. (Monday): Senate Armed Services Committee Ranking Member John McCain, R-Ariz., tells reporters he is “confident” the defense sequestration cuts will be delayed, and will never take effect. Though he acknowledged he is not a part of the Biden-McConnell talks, he indicated defense officials’ warnings about the cuts to planned spending will convince lawmakers to support a delay. He is unsure how the two sides will propose paying for the delay.

2:35 p.m. (Monday): Some conservatives like Sen. Bob Corker, R-Tenn., are enraged Obama is insisting on new revenues to delay the sequester cuts. Asked by Defense News whether he could support that, Corker angrily replied:
“Not under the president’s rules. Count me out. “I mean, it’s unbelievable that he’s proposing that,” Corker said as he boarded an elevator to go to the Senate floor. He then blared: “Unbelievable! Unbelievable!”

A calm Senate Armed Services Committee Chairman Carl Levin, D-Mich., moments later told Defense News he is confident that “one way or another” the two political parties will find a way to pay for a sequestration delay.

2:21 p.m. (Monday): But can the two sides agree on ways to pay for the costs of delaying the sequestration? “I just can’t say that we can at this point. We just don’t know,” Sen. Orin Hatch, R-Utah, told me.

1:55 p.m. (Monday): President Obama says a deal is “close.” But he reveals delaying the sequester cuts is a sticking point. He sends a message to Congress, saying a solution “has to be balanced,” meaning revenues have to be on table. Story soon at DefenseNews.com.

1:35 p.m. (Monday): BREAKING: More indications that a sequestration delay is likely. A big question is the length. In comments to reporters yesterday, Republicans and Democrats were far apart on how to pay for such a move.

1:25 p.m. (Monday): Sen. Kay Bailey Hutchison, R-Texas, says leadership tells her a deal is close. Says Senate cannot pass something that only gets Republican or only gets Democratic support “because it will not pass the other house.” Adds some refining” of the existing framework must still be done. Hutchison hints a final vote could occur by the time the ball drops. “Since this could be my final day” as a senator, the retiring Hutchison said, before talking about her experiences with Iraq and Afghan war veterans.

12:58 p.m. (Monday): A wide-smiling Sen. Bill Nelson, D-Fla., on the Senate floor: “The hour is nigh.”

12:46 p.m. (Monday): BREAKING: A deal appears close. The White House issued a statement announcing “the President will deliver remarks about the fiscal cliff at a White House event with middle class Americans.” And the incoming No. 2 GOP senator, John Cornyn of Texas, announced Senate Republicans will meet at 2 p.m. Media reports emerged just before those announcements that a deal is emerging that would extend unemployment insurance benefits and extend tax cuts for couples who make $450,000 or less. The AP reported one final sticking point is what to do about the sequestration cuts, with Democrats still pushing to delay them.

12:17 p.m. (Monday): Reporters are milling about near McConnell’s office. Word is he’s on the phone, presumably with Vice President Biden. The so-called “McConnell Whisperer” is the GOP leader’s fiscal cliff/sequestration “dance partner.” Less than 12 hours until the deadline, folks.

11:20 a.m. (Monday): How many votes might a deal that allows sequstration to occur get? More than one might expect. One of the most striking things about Sunday and today has been how many Republicans and Democrats are saying extending tax cuts while allowing the defense and domestic spending cuts to kick in might be the wisest approach. The latest: Sen. Barbara Boxer, D-Calif., who said on the Senate floor that she voted in August 2011 “for a sequester if we couldn’t find savings.” Without a deal in the next few hours that does just that, voiding the sequester, “we have to step up and do the sequester,” Boxer said. “We can’t run away from the things we’ve said.”

11:03 a.m. (Monday): Reid opens the Senate’s day by saying “negotiations continue as I speak.” The Majority Leader said “there are still some issues that need to be resolved before we can bring the legislation to the floor.” Reid gave further credence to the belief on Capitol Hill that the coming “small deal” will focus mostly on extending tax cuts for most Americans. Sen. Tom Harkin, D-Iowa, followed Reid, however, and blasted media reports that Democratic leaders were willing to extend tax breaks for all individual earners who make $450,000 or less. Harkin suggested Senate Democrats would oppose setting the level of tax-break extenders that high.

10:08 a.m. (Monday): Most of the calls from lawmakers in recent has been for compromise to avert the fiscal cliff and the defense and domestic sequestration cuts — meaning: for the other side to give in. The House largely is waiting today for the Senate to send it some kind of partial cliff-avoidance legislation. But its members filed into the ornate House chamber for morning speeches, and the one-sided calls for “compromise” continued. First up was Rep. Rob Wittman, R-Va., who called for spending cuts — the kinds of domestic programs favored by Democrats. Next up was outgoing Rep. Dennis Kucinich, D-Ohio, who passionately said “government works.” But the outspoken liberal did not follow that with a ptich for Medicare or Medicaid. No, he said government functions just fine for defense contractors and oil companies. Some political pundits believe members of the two parties are playing a game. But this correspondent hears a very different thing: Two political parties that have very different worldviews and visions for what the priorities of the United States of America should be, and how it should spend taxpayer funds.

Read more from Sunday here.