Las Vegas Sun

March 29, 2024

The Policy Racket

Reid protected Nevada’s interests in horsetrading on budget deal

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Senate Majority Leader Harry Reid leaves the Senate floor on Capitol Hill after announcing an agreement to avoid a government shutdown Friday, April 8, 2011 in Washington.

With the GOP’s 2012 budget for next year now past the House, and Democrats gearing up for a showdown over the debt ceiling, Thursday afternoon’s votes in the House and Senate to approve a budget for fiscal 2011 struck on the eve of a shutdown already seem like ancient history.

But we couldn’t quite let it go yet; not without a thorough redux of where, over the next five months, that compromise deal will prove to be a win and where it may prove to fail Nevada.

Let’s just put it this way for starters: you can tell there was a Nevadan at the negotiating table.

Senate Majority Leader Harry Reid, who hashed out the $38.5 billion deal with House Speaker John Boehner over days and weeks of negotiations, had been going through a point-by-point campaign against such provisions of the Republicans’ budget bill for weeks. Locally, he’d been joined by Nevada Democratic Rep. Shelley Berkley in highlighting the potential for losses locally in the case of projects like energy loan guarantees being compromised, or Head Start funding being stripped, or homeless veterans’ vouchers being yanked.

But in the end, Reid saved all those projects and more through able horsetrading that pulled alternative cuts out of mandatory spending. But he managed to do it a way where Nevada’s key interests barely got grazed.

First of all, there’s Yucca Mountain. There was a provision in the original House budget bill, H.R. 1, that would have made it impossible for the government to move toward shutting down the project in any way, by prohibiting any federal funds from being used toward closing operations for the project.

Members of Nevada’s delegation on both sides had called for the ouster of the project; Republican Rep. Dean Heller even tried to get the House to remove the provision by an amendment that failed. But the buck on Yucca has stopped with Senate Majority Leader Harry Reid for years, and he was once again the force that got it removed behind closed doors — both the rider and what remained of the funding — in closed-door negotiations with House Speaker John Boehner.

“In the budget we negotiated, there is no money going to Yucca Mountain,” Reid said last week.

But there is money still flowing to a whole bunch of programs that were on the chopping block, but which Reid apparently managed to save from getting lopped off.

The biggest boons for Nevada come in the areas of mining — which actually got a funding boost under the budget-stripping bill — and in various departments that fit into President Obama’s investment priorities.

The President’s pledge to “out-innovate, out-educate, and out-build” has special resonance in Nevada, where the state’s education system has the unfortunate distinction of being the most under-achieving in the nation, and politicians of both parties seem to agree that the state’s economic resurgence depends at least in part on the energy alternatives that that Obama Administration’s been boosting.

The biggest save in that area was the Section 1705 loan guarantee program, which was going to be zeroed out under the Republican bill. Pulling the plug on that funding would have jeopardized the progression of eight Nevada projects, such as the SolarReserve Crescent Dunes project in Tonopah, which will introduce the country to round-the-clock solar power generation and storage model that developers say will power 75,000 Las Vegas area homes during peak usage, and create jobs: 650 construction jobs immediately on-site, and anther 4,500 across the state in various supportive and manufacturing services.

“This is a big deal,” Reid said. “It’ll take care of a lot of the unemployment in Nye County, but it’ll also draw from Clark County.”

Under the terms of the agreement, any project that had had its loan dollars approved, won’t be in danger of losing any federal help for their projects to move forward. That sparked a collective sigh of relief from project managers like SolarReserve CEO Kevin Smith, because in the case of such novel alternative energy projects, the backing of the federal government is an all but absolutely necessary precondition for attracting private investments.

Across the country, spending on energy efficiency and renewable energy programs was reduced by about only $116 million; negotiators found far more to pull out in earmarks, which let them leave the basic programs, like the loan guarantees, intact.

Reid’s team managed a similar feat over transportation funding — another area of infrastructure that’s important to Las Vegas — according to senior officials familiar with what happened during the process. They removed about $2.5 billion in funding for the Department of Transportation, a seemingly big chunk to take out from a wing of the government that’s trying to spur a high-speed rail revolution in the next several years. But the money came from unspent funds under the authority of the transportation committee — in other words, sitting earmarks that let the negotiators take a huge slice out of the transportation budget that won’t affect any percolating initiatives significantly.

When it comes to education, labor, and research, the paring down was even slighter. Science funding escaped almost unscathed — a paltry $40 million lost. Existing job-training programs took a $182 million hit, but that was offset in large part by $125 million toward a Workforce Innovation Fund to encourage states to take on some of the burden of reforming and investing in job training themselves. And education funding almost no hit whatsoever.

The Department of Education lost $1.3 billion overall, but most of that came from terminating subject or geographic-area specific programs the White House had already flagged for future termination. Head Start, Title I, Race to the Top and Teacher Incentive dollars didn’t get touched, and the Pell Grant reductions aren’t actually going to reduce the maximum possible award for students enrolled during the academic year (though it will remove the summer award that year-round students were previously eligible for).

And then, there’s mining.

While the compromise drew down funds in most areas, or at best, left them on an even keel from fiscal 2010 to 2011, mining safety actually got a kick-up: $6.5 million more than they did last year, which is expected to help the Mine Safety and Health Administration contend with a growing backlog of reviews and appeals, and improve their emergency response capability.

While there were reductions in other areas related to mining, they were minor: only about $42 million was cut from the Interior Department’s Mineral Leasing programs, which determines when companies can for minerals on federal land, and the Bureau of Land Management lost only about 1.5 percent of its overall budget.

Of course, these little victories aren’t the whole story of the bill. Keep in mind that they only determine the state of affairs in Nevada and across the country for the next five months — a timetable that’s led two prominent Republicans of the Silver State delegation to complain that the cuts are neither robust nor serious enough to support.

Heller and Sen. John Ensign both voted against the final budget compromise on Thursday, registering similar complaints.

“If we are going to turn our economy around and create jobs, our nation must get its fiscal house in order. After reviewing the final funding agreement, it just does not achieve this goal,” Heller said last Tuesday, announcing his decision not to support to compromise in advance of the deal. “The budget agreement only equates to 2 percent in cuts for this fiscal year. It is time for the administration and Congress to do more to place our country on a sustainable fiscal path.”

Ensign’s vote was a little bit of a surprise, given that he’d urged the negotiators, directing his message especially to his fellow Republicans, to drop their demand for policy riders and just strike a deal to keep the government funded already.

“While I commend the bipartisanship that it took to reach this spending deal, I simply feel that the fiscal crisis that we face as a nation requires much more than this resolution offers,” he said Thursday. “Tell me what difference $38.5 billion in cuts make when we are spending in the trillions and serious entitlement reform remains off of the table?”

The delegation’s third Republican, Rep. Joe Heck, also acknowledged that the far country has far more ponderous fiscal woes, but supported the bill as a first step in a series of steps to combat the problem.

“I’m pleased that we finally got it done and that we won’t be shutting down the government,” Heck said last week after the budget deal was struck. “We’re reducing spending by historic amounts...We can turn our attention to the fiscal year 2012 budget, where the cuts will be measures in trillions, not billions.”

That process is already under way, now that the House has passed the Ryan budget and Obama has hammered out the basics of his plan: both outline reductions in the trillions to place over the next several years.

Reid has pledged to continue to block any Republican attempts to kill or hamstring the Nevada-reaching programs he already fought to save as the budget process moves on to its next, even more critical stages. But compromise may prove to be tough once again.

“I hope it doesn’t continue to be like this,” Berkley said the night negotiators reached a compromise. “There was a time these budget passed unanimously. We’ve come a long way since then.”

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