Democrats, GOP Reach Rare Bipartisan Budget Deal
Just two months removed from the October government shutdown, Senate and House budget negotiators have reached a deal to fund the federal government long before the January 15 deadline. The mini-budget is expected to total around $85 billion with $45 billion aimed at rolling back some of the 2014 sequestration cuts, $20 billion to replace sequestration cuts in 2015, and $20 billion to reduce the deficit.
The key point of the deal is a $45 billion increase in spending for 2014. The budget package cuts the sequestration cuts to both defense and non-defense discretionary spending by half and a quarter of the cuts in 2015. Sequestration will still force significant austerity cuts in the coming years which many consider a win for the Republicans since they didn’t agree to a single tax increase to offset the sequestration cuts. To cover some of the cost of the bill, however, the government will charge fliers an extra $5 “security fee” and force government workers to contribute more to their pensions.
Because of the lack of cuts or tax increases, a similar deal for 2016 would be unlikely since the programs used to offset the sequestration cuts are already used up.
Another win for the Republicans is the lack of any unemployment insurance extension which means 1.3 million long-term unemployed Americans will stop getting unemployment benefits once they expire. One win for the Democrats was that both Medicare and Social Security stayed intact without cuts from the Republicans.
“I’m proud of this agreement,” said Wisconsin Congressman and lead budget negotiator Paul Ryan. “It reduces the deficit—without raising taxes. And it cuts spending in a smarter way. It’s a firm step in the right direction, and I ask all my colleagues in the House to support it.”
While the Senate is fully expected to pass the bill, the Republicans in the House of Representatives are not always willing to play ball. Ryan’s role in the negotiations and the lack of any tax increases could help sway some votes while others in the Republican Party may support the bill to reduce the defense spending cuts.
(Image courtesy of Gage Skidmore)