US bipartisan negotiators reach modest budget pact

WASHINGTON - The Associated Press

Senate Budget Committee Chairman Patty Murray (R) and House Budget Committee Chairman Paul Ryan hold a press conference to announce the Bipartisan Budget Act of 2013, at the US Capitol. AFP photo

Top Republicans and President Barack Obama are lining up behind a modest U.S. budget agreement that restores about $63 billion in automatic spending cuts from programs ranging from parks to the Defense Department and eliminates the threat of another partial government shutdown early next year.

The deal to ease those cuts for two years is aimed less at chipping away at the nation’s $17 trillion national debt than it is at trying to help a dysfunctional Capitol stop lurching from crisis to crisis. It would set the stage for action in January on a $1 trillion-plus spending bill for the budget year that began in October.

The measure unveiled by House Budget Committee Chairman Paul Ryan, a Republican, and his Senate counterpart, Democrat Patty Murray, blends $85 billion in spending cuts and revenue from new and extended fees to replace $63 billion in cuts to agency budgets over the coming two years.

The White House quickly issued a statement from Obama praising the deal as a “good first step.” He urged lawmakers in both parties to follow up 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.”

Bipartisan approval is expected in both houses of Congress in the next several days, despite grumbling from liberals over the omission of an extension of long-term unemployment benefits and even though hardcore conservative tea party-aligned groups have already begun pushing Republican lawmakers to oppose it.

$63 billion in cuts

The measure unveiled by House Budget Committee Chairman Paul Ryan, a Republican, and his Senate counterpart, Democrat Patty Murray, blends $85 billion in spending cuts and revenue from new and extended fees - to replace $63 billion in cuts to agency budgets over the coming two years.

The package would raise the Transportation Security Administration fee on a typical nonstop, round-trip airline ticket from $5 to $10; require newly hired federal workers to contribute 1.3 percentage points more of their salaries toward their pensions; and trim cost-of-living adjustments to the pensions of military retirees under the age of 62. Hospitals and other health care providers would have to absorb two additional years of a 2-percentage-point cut in their reimbursements from a government program providing health care coverage to the elderly.

The U.S. federal budget year begins on Oct. 1. But Congress, snarled in political disagreements, could not agree to a budget plan at the time and the government was shut down. The fight centered on Republican attempts to block funding for President Barack Obama’s overhaul to the American health care system. The country also came close to the first-ever federal default when Congress couldn’t reach agreement on raising the debt ceiling. Republicans relented and agreed to a short-term deal to fund the federal government and raise the debt ceiling when it became clear that Americans were deeply angered over their tactics.

The plan pales compared with earlier, failed attempts at a “grand bargain” that would trade tax hikes for structural curbs to ever-growing benefit programs like Medicare and Social Security, which provides monthly pension benefits to senior citizens.. But it would at least bring some stability on the budget to an institution - Congress - whose approval ratings are in the gutter.

“Our deal puts jobs and economic growth first by rolling back harmful cuts to education, medical research, infrastructure investments and defense jobs for the next two years,” Murray said.

Ryan said the agreement “makes sure that we don’t have a government shutdown scenario in January. It makes sure that we don’t have another government shutdown scenario in October,” Ryan said.