Last updated: December 5, 2013 11:50 pm

Paul Ryan turns peacemaker in US budget battles

Paul Ryan and Patty Murray©Getty

In talks: Paul Ryan and Patty Murray

If Congress succeeds in striking a US budget deal in the coming days, it will in no small measure follow from the decision by Paul Ryan, the Republican chairman of the House budget committee, to set aside his quixotic ambitions to impose a staunchly conservative fiscal agenda on the country.

Mr Ryan, who returned to Capitol Hill after being Mitt Romney’s vice-presidential running mate in 2012, is in the midst of heated negotiations with Patty Murray, the Democratic chair of the Senate budget committee, to set government funding levels for the coming two years.

Aides say an agreement – which would remove the threat of another federal shutdown – is close, though talks could still fall apart.

On Thursday, it was the turn of Democrats in the House to balk at the terms of the deal, complicating the final stretch of negotiations. “There is no budget agreement yet,” said Chris Van Hollen, the top House Democrat in the negotiations. “Important priorities are at risk of being left behind.”

For years, Mr Ryan, who is 43 and is known for his early-morning workouts, appreciation for metal rap and hunting prowess, has been prepared to take big political risks in order to fulfil his vision of smaller government, with lighter regulation and lower taxes.

Even if they had no chance of becoming law with Barack Obama in the White House, since 2011 Mr Ryan has repeatedly put forth – and persuaded fellow Republican lawmakers to back – contentious plans to overhaul social safety net programmes that became lightning rods for Democratic criticism.

The effort cemented his role as chief economic policy maker for the Republican party, and made him a credible bridge builder between its more moderate leadership and the purist Tea Party factions that have been so averse to any fiscal compromise.

But in the wake of the 2012 electoral defeat, Mr Ryan has become more pragmatic, acknowledging that his grand vision for US fiscal structure was unlikely to materialise in the near future, rejecting some of the brinkmanship that has defined Republican budget strategies over the past two years as politically counterproductive, and accepting the usefulness of minor compromises with Democrats.

Now, he could well become the unlikely chief architect of an agreement that does little to solve any of long-term US debt problems, but at least removes some of the uncertainty from the path of fiscal policy.

“It’s a really big moment for him,” said John Feehery, a Republican strategist at Quinn Gillespie in Washington. “If he succeeds, it will be quite a feather in his cap.”

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Democrats close to the budget talks have certainly praised Mr Ryan’s attitude in the talks as constructive, and the dynamic with Ms Murray, a liberal senator from Washington state, has been good. “They’ve been working together well. We think he wants to get a deal. He’s negotiating with her in good faith, and that’s part of the reason why there is optimism and hope that they can close this out,” said one Democratic aide.

The deal being discussed would remove the threat of another government shutdown until at least the end of the current fiscal year in September 2014, and probably the following year as well. It would fund government agencies with about $1tn per year: slightly above current levels of $986bn, but below what Democrats would like to see.

It would replace some of the automatic spending cuts known as “sequestration”, which would otherwise push government spending down to $967bn in January, with a mix of policies. These would include longer-term spending cuts, such as curbs on federal worker retirement plans, and new revenue to be generated from higher fees – with airport security charges at the top of the list. This is a far cry from the sweeping changes to fiscal outlook that Mr Ryan has been demanding for years.

“This is a very, very, very, narrow deal. We are not talking about a grand bargain. We are not talking about people making tough choices,” said another Democratic aide close to the talks.

Because of its lack of ambition, Mr Ryan could have some trouble selling the deal to his party’s rank and file. Many conservatives would like to see lower sequestration spending levels remain in place, though defence hawk Republicans are worried about the hit to the Pentagon budget and will be happy to see some relief.

Still, a successful conclusion of the budget talks could reignite speculation that Mr Ryan may attempt another bite at the White House, possibly even at the top of the ticket, in 2016. Otherwise, the boyish-looking conservative budget guru from southern Wisconsin is likely to aim for chairman of the ways and means committee in 2015, when he would have even more authority to shape fiscal policy than he does now.

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