Congress’s top budget negotiators have reached an agreement that would fund the government for the next two years—this time without the partisan rancor and drama that have poisoned budget talks since 2011.
The $85 billion deal negotiated by Rep. Paul Ryan and Sen. Patty Murray sets overall discretionary spending levels at $1.012 trillion in 2014 and $1.014 trillion in 2015, undoing about $63 billion of the automatic cuts for the next two years. Without changing the law, sequestration’s cuts will continue to get deeper, lowering discretionary spending to $967 billion in 2014.
The Ryan-Murray agreement is a notable break from the fiscal brinksmanship that has sent Washington lurching from one budget crisis to the next, most recently shutting down the government for 16 days in October. “This deal does not solve all our problems. But I think it’s an important step to heal some of the wounds here in Congress,” said Murray on Tuesday.
The spending increases to undo sequestration will be offset by higher government fees, and federal and military pension cuts. The offsets are also big enough to reduce the deficit by an additional $20 to $23 billion. But about two-thirds of sequestration for 2014 and 2015 would stay in place.
The agreement is likely to come to a vote in the House before the week’s end, as the chamber is scheduled to break for Christmas recess after Friday and won’t be back in session until 2014. Congress must pass a budget agreement before January 15 to avoid another government shutdown.
Unlike in previous fights, Congressional leaders managed to reach a preliminary agreement ahead of schedule, and House GOP leaders say they want to avoid repeating the mistakes of October’s shutdown. “While modest in scale, this agreement represents a positive step forward by replacing one-time spending cuts with permanent reforms to mandatory spending programs that will produce real, lasting savings,” Speaker John Boehner said in a statement.
Ryan and Murray had more maneuvering room as Congress has been almost entirely consumed with the fight over Obamacare. But their new comity was also possible because the bar was set so low. Congress and the White House have all but given up on reaching a long-term deficit reduction deal that it was originally aiming for. Instead, they entirely avoided touching major entitlement and tax programs—the biggest and most controversial sources of deficit reduction.
“The key here is nobody had to sacrifice their core principles,” said Ryan.
“Earlier this year, I called on Congress to work together on a balanced approach to a budget that grows our economy faster and creates more jobs – not through aimless, reckless spending cuts that harm our economy now, but by making sure we can afford to invest in the things that have always grown our economy and strengthened our middle class,” said President Obama in a statement released by the White House. “Today’s bipartisan budget agreement is a good first step.”
The agreement preserves the $2.1 trillion in deficit reduction mandated by the 2011 debt-ceiling deal and reduces the deficit by an additional $23 billion. But the spending hikes and revenue increases already irked some conservative members and groups. “Heritage Action cannot support a budget deal that would increase spending in the near-term for promises of woefully inadequate long-term reductions,” the group said earlier Tuesday. Liberals, for their part, aren’t happy that the deal preserves so much of sequestration, whose automatic cuts will continue through 2021. The deal also doesn’t include an extension of federal unemployment benefits, which are scheduled to expire at the end of this month for 1.3 million long-term jobless. “This agreement doesn’t include everything I’d like – and I know many Republicans feel the same way,” said Obama in the statement. “That’s the nature of compromise. But it’s a good sign that Democrats and Republicans in Congress were able to come together and break the cycle of short-sighted, crisis-driven decision-making to get this done.” He called on members of Congress “to take the next step 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.” Even if the Ryan-Murray deal passes both chambers, it’s just the first step in the process. Congressional appropriators then must decide how to allocate the money to different defense and domestic programs—a full budget that must also pass Congress. When asked about the early conservative opposition to the budget agreement, Ryan replied: “As a conservative…I deal with the way things are, not the way I want things to be.”
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