House Budget Committee Chairman Paul Ryan (R-WI) and Senate Budget Committee Chairwoman Patty Murray (D-WA) announced a two-year budget deal Tuesday evening that will cancel automatic across the board spending cuts for the next two years and avert the possibility of another government shutdown in early January.
The much-anticipated bipartisan package includes $63 billion of new spending or “sequester relief,” $85 billion of total savings, and $23 billion in net deficit reduction, according to staffers. The additional spending would be offset by increases in fees and pension costs for federal and military employees, but no increases in tax rates.
The agreement stands an excellent chance of winning passage in the House and Senate before Congress adjourns for the year. The House is expected to vote before adjourning on Friday for the rest of the year, and the Senate may vote next week.
Still, there is widespread displeasure among conservatives and Democrats alike about key provisions of the deal. Democrats are especially unhappy that the agreement would raise federal employees’ pension costs and allow supplemental unemployment insurance to expire this month. Many Republicans don’t think the deal will do enough to control long term spending and some insist it would be a mistake to lift the caps mandated by the 2011 Budget Control Act that have forced the government to cut back spending and furlough many workers this year.
Democrats have vowed to continue to press the GOP for a compromise to prevent more than one million people from losing their unemployment benefits at the end of the month. Even though the job market is improving along with the economy, many people continue to struggle. House Speaker John Boehner (R-OH) said recently he would consider a proposal from the White House to continue to provide supplemental benefits to those who have exhausted their state unemployment benefits, but insisted it be considered outside the framework of a budget deal.
While the agreement bears no relationship to a “Grand Bargain” of entitlement and tax reforms once sought by President Obama and Boehner to reduce the $17.3 trillion debt, it represents a rare bipartisan consensus on spending policy after years of political trench warfare. The accord would end the automatic sequester mandated by the 2011 Budget Control Act and raise agency and program spending to slightly more than $1 trillion a year in fiscal 2014 and 2015.
Ryan and Murray essentially split the difference between the Senate budget level of $1.058 trillion and the House budget level of $967 billion. The agreement would provide $63 billion in sequester relief over two years, split evenly between defense and non-defense programs. In fiscal year 2014, defense discretionary spending would be set at $520.5 billion, and non-defense discretionary spending would be set at $491.8 billion.
The additional spending is fully offset by savings elsewhere in the budget. The agreement includes dozens of specific deficit-reduction provisions, with mandatory savings and non-tax revenue totaling approximately $85 billion. The agreement would reduce the deficit by between $20 and $23 billion.
Ryan, the Republicans’ 2012 vice presidential nominee, and Murray, a hardworking member of the Senate Democratic leadership, who is closely allied to Majority Leader Harry Reid, spent weeks haggling behind closed doors in search of a bipartisan spending agreement that could pass muster with congressional leaders, committee chairmen and rank and file members.
ALL THE MEN AND WOMEN MERELY PLAYERS….
The tall, lean Ryan and the short, bespectacled Murray were something of a political odd couple in their quest for a deal. This was Murray’s first year as Senate Budget Committee Chairwoman, and she persuaded the Senate to adopt a budget resolution for the first time in years. But once the Senate had acted last April, Ryan and Boehner ignored her repeated calls to meet in conference to iron out the many differences between the House and Senate-passed versions of the 2014 budget.
Murray grew frustrated and irate that Ryan was ignoring her, and made numerous floor speeches calling attention to the House Republicans’ unwillingness to play ball. That all changed after Congress and the White House agreed to a short-term deal ending the government shutdown and ordering a special 29-member House-Senate conference committee headed by Ryan and Murray to iron out a long-term budget blue print for avoiding another government shutdown in mid-January.