Budget Deal Announced By Patty Murray, Paul Ryan

[Mayhem]

http://www.huffingtonpost.com/2013/12/10/budget-deal-2013_n_4421624.html

Bars set this low were made to be jumped over. And yet, it was something of a marvel on Tuesday when lawmakers from the House and the Senate took to the microphones to announce that they had reached a budget deal.

The deal, which was negotiated over the past few weeks by House Budget Committee Chairman Paul Ryan (R-Wis.) and Senate Budget Committee Chairwoman Patty Murray (D-Wash.), would set spending for the next fiscal year at $1.012 trillion and increase it to $1.014 trillion the year after that. Should their budget framework actually pass through Congress, it would represent an increase in federal spending by $45 billion in one year and $63 billion over the course of two years.

To pay for those increases, Murray and Ryan agreed to hike airline travel fees and require both federal workers and military personnel to contribute a greater portion of funds to their pensions, among other provisions.

The deal does not include an agreement to raise the nation's debt limit, which the Treasury has forecast will be hit between March and June.

Both Murray and Ryan hailed the deal as a major breakthrough in a press conference.

"For far too long here in Washington D.C. compromise has been considered a dirty word, especially when it comes to the budget," Murray said. "We have broken through the partisanship and the gridlock."

The deal is very close to the halfway compromise Murray dangled at the start of the talks, coming in between the Senate's budget level of $1.058 trillion and the House's $967 billion. But to get Ryan to agree to undo some of the draconian, across-the-board sequestration cuts, Murray apparently had to find money elsewhere. The budget framework produces savings and non-tax revenue totaling $85 billion, $20 billion to $23 billion of which would be devoted to deficit reduction.

"As a conservative I think this is a step in the right direction," Ryan said. "What am I getting out of this? I'm getting more deficit reduction."

The $63 billion in sequestration relief would be split 50/50 between defense programs, which were set to take a greater hit in the next year, and domestic programs. Murray and Ryan's framework only eliminates a small portion of the roughly $180 billion in sequestration cuts set for fiscal years 2014 and 2015, but Congress itself would be granted greater power to administer the remainder of the cuts.

As difficult as it proved to be to agree on the modest budget framework, the act of actually passing it into law will be harder. Conservative groups began calling for the plan to be rejected before it was even announced, saying sequestration cuts were a cherished victory that Republicans shouldn't relinquish. Among those expressing their opposition were Heritage Action, Americans for Prosperity, FreedomWorks and Grover Norquist, the president of Americans for Tax Reform.

Ryan, however, said House Republicans would ultimately back the deal.

"I expect we're going to have a healthy vote in the House Republican Caucus," Ryan said. "We are keeping our principles. The key here is nobody had to sacrifice their core principles. Our principles are don't raise taxes, reduce the deficit."

Sure enough, moments after the agreement was announced, House Speaker John Boehner (R-Ohio) and House Majority Leader Eric Cantor (R-Va.) offered their support.

"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," Boehner said in a statement.

"This agreement is a step forward consistent with prior Republican attempts to replace the sequester’s indiscriminate across-the-board cuts," Cantor said.

Murray said she also had the backing of her party's leadership, and that she expected the agreement to pass muster in her chamber.

But progressives viewed the fact that the final arrangement did not include an extension of unemployment insurance as a major tactical defeat. Federal unemployment benefits are currently set to expire on Dec. 28, affecting an estimated 1.3 million jobless Americans. Democrats will now push to renew the benefits in a separate piece of legislation.

In addition, news of the pension provision angered federal workers even before the deal was announced, with dozens of federal unions signing on to a letter opposing it.

"Federal workers have sacrificed over $113 billion for deficit reduction since 2011, including a three-year pay freeze and increased pension contributions for newly hired employees. This figure does not include the up to eight furlough days caused by sequestration this summer and a 16-day shutdown in October which resulted in financial hardship and profound anxiety for half the government’s workforce and their families," the coalition of labor groups wrote.

"Given these contributions, we are dismayed to learn that increasing the pension contributions and/or changing the retirement formula for current federal employees is on the table," they wrote. "This is simply unacceptable."

"We think it's only right and fair that they pay something more to their pensions, just like the hard-working taxpayers that pay for those pensions in the first place," Ryan said.

Murray argued that if a deal had not been reached, federal workers would have felt more pain from sequestration.

"Many of these same people would be facing furloughs, layoffs and uncertainty," Murray said. "We have brought back certainty."

Budget Deal Whacks Medicare Providers

http://www.huffingtonpost.com/2013/12/10/budget-medicare-cuts_n_4422676.html?ref=topbar

It's hard to discern in the budget deal announced Tuesday night, but the bulk of its deficit savings come from fresh cuts to Medicare providers.

Under the proposal announced by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), chairs of their chambers' respective budget committees, lawmakers will replace about two-thirds of the hated automatic cuts under budget sequestration (totaling $63 billion) for this year and next, and cut the deficit by about $23 billion.

That $23 billion -- and then some -- is explained in a short line in the summary of the deal: "The budget proposal saves $28 billion over ten years by requiring the President to sequester the same percentage of mandatory budgetary resources in 2022 and 2023 as will be sequestered in 2021 under current law," it says.

"Mandatory budget resources" refers mostly to Medicare providers.

Under the Budget Control Act of 2011, which set up the sequester, so-called discretionary programs were subject to 5.1 percent across-the-board cuts when the Congress' "supercommittee" failed to find targeted savings. Most "mandatory" programs, such as Social Security and Medicaid, were exempt. But Medicare was not, and was subject to a 2 percent cut aimed at providers, worth more than $120 billion over the 10 years of the sequester.

By extending the sequester for mandatory programs, Medicare providers -- including hospitals -- will have to take the hit for two more years.

Congressional staffers were not prepared to talk about the cuts on the record, but said it boiled down to Medicare providers being the least-painful target. Democrats, they noted, have not traditionally been strong supporters of preserving the payments to providers, being much more concerned with maintaining funds for beneficiaries. Republicans saw extending for two years cuts that are already in the law for mandatory programs as a simple way to add deficit reduction to the replacement of sequestration for discretionary programs.

"As far as finding $25 billion in deficit reductions, that's a pretty easy place to get it," one aide said.

But a trade group for publicly traded hospitals slammed the deal, saying it jeopardized seniors' access to care.

"America’s hospitals have grave concerns about the Murray-Ryan proposed budget agreement and urge Members of Congress to oppose it," Chip Kahn, president of the Federation of American Hospitals, said in a statement. "The budget agreement threatens access to critical health care services for seniors by trading off Medicare cuts for increases in government and defense spending today. Rather than providing relief to the arbitrary Medicare sequester cuts, this agreement maintains the current cuts and extends these cuts into the future. It sustains bad budget policy under the guise of solving real mandatory spending issues facing this country."