Budget agreement reached, sequester cuts partially rolled back

Paul Ryan and Patty Murray

After months of working through differences, Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA), chairs of the respective chamber’s budget committees, announced this evening that they’ve struck a two-year discretionary spending agreement that would avoid the prospect of another government shutdown.

The agreement, dubbed the “Bipartisan Budget Act of 2013,” would spend $1.012 trillion in the current fiscal year and $1.013 trillion in FY 2015, according to a summary of the agreement. It will rollback $63 billion of planned spending cuts between this and next year. The funding measure will not tackle mandatory spending (ie. entitlements), nor does it raise the debt ceiling.

“I’m proud of this agreement,” Ryan said in a joint statement. “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.”

“This agreement breaks through the recent dysfunction to prevent another government shutdown and roll back sequestration’s cuts to defense and domestic investments in a balanced way,” Murray said. “It’s a good step in the right direction that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.”

Ryan noted in the news conference in which they announced the deal that it spends less than the budget passed by the Senate earlier this yet and said that he and Murray met the in the middle. What he got was a deal that spends $45 billion more than the Budget Control Act of 2011 (BCA), the bipartisan measure that mandated the much-needed spending cuts that this agreement partially replaces.

The BCA set discretionary spending at $967 billion in FY 2014. Republicans sought $986 billion to $988 billion in previous budget discussion, depending on the estimate in spending for FY 2014, roughly $19 billion to $21 billion more than sequester-level spending. Senate Democrats wanted to completely undo the sequester, proposing $1.058 trillion in discretionary spending.

While the deal purports to reduce the deficit by $23 billion, that number is worth as much as the paper on which it’s written. The BCA was set to reduce deficits, but it’s being partially discarded. What’s more, the agreement increases fees to accomplish this goal.

The additional costs to federal employees for their pension isn’t as big a concession as Ryan would have us believe. This is an unfunded liability that had to be reformed at some point, anyway. But using the savings to replace sequester cuts seems wholly irresponsible.

Then again, the deal offers nothing in terms of fundamental reforms. It just kicks the can down the road, a point that Ryan admits.

Regardless of the spin, it will be huge surrender on spending if House Republicans pass this agreement on Friday. They’re desperate to avoid any hiccups before the 2014 mid-term and would rather concede ground on spending in the short-term.

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