A bipartisan budget agreement reached tonight by House and Senate negotiators would avoid a government shutdown in January and help break a fiscal stalemate that has caused gridlock in Washington.
But it would stop far short of tackling the underlying causes of the national debt.
The deal would raise military and domestic spending over the next two years, while avoiding the continuation of deep across-the-board spending cuts. Taxes will not go up under the plan, which will instead raise fees on some airline tickets.
While modest in scope, the compromise represents the first budget agreement in two years. It could pave the way to a broader debate to deal with the root causes of the national debt, the rising costs of entitlement programs such as Social Security and Medicare.
House Budget Chairman Paul Ryan, R-Wis., and Senate Budget Chairwoman Patty Murray, D-Wash., announced the deal at a Capitol Hill news conference, capping a month of intense negotiations.
“I see this agreement as a step in the right direction,” Ryan told reporters. “In divided government, you don’t always get what we want. That said, we can still make progress to our goals.”
The agreement eliminates about $65 billion in across-the-board domestic and defense cuts — known as sequester — and includes an additional $25 billion in deficit reduction from Medicare savings through 2022 and 2023, two years beyond the cuts set by the Budget Control Act of 2011. Those savings would be replaced by increased fees for airline travelers and cuts to pensions for federal workers and members of the military.
The deal calls for military and domestic spending to go slightly beyond $1 trillion — higher than the $967 billion in the Budget Control Act — but would be capped for the 2014 and 2015 fiscal years.
In the coming days, the agreement faces a difficult sales job among rank-and-file Republicans, who believe the spending is too high, and Democrats, who lost their fight to include an extension of unemployment benefits to 1.3 million workers that are set to expire this month.
“I’m confident that we won’t have 100 percent of the Senate or 100 percent of the House,” Murray said tonight. “What the American people ought to know: This Congress can work. People can come from very different corners and find common ground.”
The budget conference, comprising Democrats and Republicans from both chambers, has met twice since the government shutdown. But Murray, Ryan and their staffs have engaged in private negotiations throughout the past two months. As they emerged tonight with their deal, the two chief negotiators said the agreement called for cutting spending “in a smarter way.”
The White House applauded the deal, a sign that President Obama would encourage skeptical House Democrats to support the plan.
“This agreement doesn’t include everything I’d like — and I know many Republicans feel the same way,” Obama said in a 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.”
The deal won’t be finalized until it is voted on by the House and Senate, and it may be a tough pill to swallow for some Republicans, particularly those facing primary challenges from tea party activists in the mid-term elections. Several conservative groups spoke out against the agreement, urging Republicans to vote against it.
“We urge Congress to stick to their promise and adhere to the deficit-reducing measures of the Budget Control Act. It is essential if our country is to achieve economic prosperity once again. It is also the right thing to do,” Phillip Ellender, president and COO of Government and Public Affairs for the Koch Companies Public Sector LLC, wrote Tuesday in a letter to lawmakers.
Sen. Mitch McConnell of Kentucky, the Republican leader, signaled his skepticism about the agreement because the spending went above the 2011 Budget Control Act.
“I remain convinced the Budget Control Act has done what it was supposed to do,” he said. “We’ve reduced government spending for two years in a row for the first time since right after the Korean War. It has been a success, and I hope we don’t revisit it.”
Ryan, the 2012 Republican vice presidential nominee who has deep credentials among fiscal conservatives, acknowledged the questions he will face about the deal. But he said it was time for a Republican reality check.
“As a conservative, I deal with the situation as it exists. I deal with the way things are — not necessarily the way things I want them to be,” Ryan said, adding that he has passed three consecutive budgets that have gone nowhere in the Senate.
“We’re in divided government,” he added. “I realize I’m not going to get that, so I’m not going to go a mile in the direction I want to, but I will take a few steps in the right direction. This agreement takes us in the right direction.”