The deal to ease those cuts for two years is aimed less at chipping away at the nation’s 17 trillion dollars national debt than it is at trying to help a dysfunctional Capitol stop lurching from crisis to crisis. It would set the stage for action in January on a 1 trillion dollar-plus spending bill for the budget year that began in October.
The measure unveiled by House Budget Committee Chairman Paul Ryan, a Republican, and his Senate counterpart, Democrat Patty Murray, blends 85 billion dollars in spending cuts and revenue from new and extended fees to replace 63 billion dollars in cuts to agency budgets over the coming two years.
The White House quickly issued a statement from Obama praising the deal as a “good first step.” He urged lawmakers in both parties to follow up and “actually pass a budget based on this agreement so I can sign it into law and our economy can continue growing and creating jobs without more Washington headwinds.”
Bipartisan approval is expected in both houses of Congress in the next several days, despite grumbling from liberals over the omission of an extension of long-term unemployment benefits and even though hardcore conservative tea party-aligned groups have already begun pushing Republican lawmakers to oppose it.
The measure unveiled by House Budget Committee Chairman Paul Ryan, a Republican, and his Senate counterpart, Democrat Patty Murray, blends 85 billion dollars in spending cuts and revenue from new and extended fees—to replace 63 billion dollars in cuts to agency budgets over the coming two years.
The package would raise the Transportation Security Administration fee on a typical nonstop, round-trip airline ticket from 5 to 10 dollars; require newly hired federal workers to contribute 1.3 percentage points more of their salaries toward their pensions; and trim cost-of-living adjustments to the pensions of military retirees under the age of 62.
Hospitals and other health care providers would have to absorb two additional years of a 2-percentage-point cut in their reimbursements from a government program providing health care coverage to the elderly.
The US federal budget year begins on October 1. But Congress, snarled in political disagreements, could not agree to a budget plan at the time and the government was shut down. The fight centered on Republican attempts to block funding for President Barack Obama’s overhaul to the American health care system.
The country also came close to the first-ever federal default when Congress couldn’t reach agreement on raising the debt ceiling.
Republicans relented and agreed to a short-term deal to fund the federal government and raise the debt ceiling when it became clear that Americans were deeply angered over their tactics.
The plan pales compared with earlier, failed attempts at a “grand bargain” that would trade tax hikes for structural curbs to ever-growing benefit programs like Medicare and Social Security, which provides monthly pension benefits to senior citizens. But it would at least bring some stability on the budget to an institution—Congress—whose approval ratings are in the gutter.
“Our deal puts jobs and economic growth first by rolling back…harmful cuts to education, medical research, infrastructure investments and defense jobs for the next two years,” Murray said.
Ryan said the agreement “makes sure that we don’t have a government shutdown scenario in January. It makes sure that we don’t have another government shutdown scenario in October,” Ryan said. “It makes sure that we don’t lurch from crisis to crisis.”
Ryan is set to pitch the measure to skeptical conservatives at a closed-door Republican meeting on Wednesday. Democrats are set to discuss it as well.
The measure has received tepid support from the Republican House Speaker John Boehner and Minority Leader Nancy Pelosi.
“Tonight’s agreement represents a step toward enacting a budget for the American people and preventing further manufactured crises that only harm our economy, destroy jobs and weaken our middle class,” Pelosi said in a statement.
Given the internal Republican divisions in the House, Boehner is likely to need Democratic votes to approve any deal. It was not immediately clear how many Democratic lawmakers would support a plan that lacked an extension of long-term unemployment benefits.
The legislation that ended the 16-day partial government shutdown in October expires on January 15, and the agreement between Murray and Ryan stipulates a new spending level for the remainder of the current budget year as well as the one that begins next October 1.
While Tuesday’s agreement would have little impact on deficits, it holds the potential for avoiding politically charged budget clashes for the next year or two. It also was reached without the threat of an impending catastrophic deadline hanging over lawmakers’ heads.
But the plan does nothing to address three of the big drivers of American deficit spending—the Medicare government health insurance program for the elderly, the Medicaid aid program for the poor and the Social Security government pension system.
Conservatives are upset that the plan rolls back automatic spending cuts, known as the sequester, while liberals are angered about the requirement that federal employees will have to pay more toward their pension accounts.
Significantly for Democrats, they failed in their bid to include an extension of benefits for workers unemployed longer than 26 weeks. The program expires on December 28, when payments will be cut off for an estimated 1.3 million individuals.
Officials said that under the agreement, an estimated 63 billion dollars in automatic spending cuts would be restored through the end of the next budget year, which runs to September 30, 2015.
The relief to the Pentagon is relatively modest since the agency started out facing a cut of 20 billion dollars below the harsh cuts it faced in 2013; the agreement replaces those cuts but doesn’t bring the military’s budget much above 2013 levels.
Even before the deal was announced, conservative organizations were attacking the proposal as a betrayal of a 2011 agreement that reduced government spending and is counted as among the main accomplishments of tea party-aligned Republicans who came to power earlier the same year in the House pledging to slash government spending.
Republican Senator Marco Rubio, a potential 2016 presidential candidate, issued a statement opposing the measure