House and Senate Agree to Budget for Remainder of Fiscal Year

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House and Senate Agree to Budget for Remainder of Fiscal Year

In a rare display of bipartisanship, Democrat and Republican leaders in the House and Senate announced a budget deal on Tuesday December 10.  Lead by House Republican Budget Committee Chairman Paul Ryan (R-WI) and Senate Budget Committee Chairwoman Patty Murray (D-WA), each side got a little of what they were seeking and some of what they were initially opposed to, a sign that each side was willing to compromise.  

 

The budget establishes a $1.012 trillion discretionary spending level for 2013 — halfway between the $967 billion sequester level and the much larger number Democrats were seeking. It also sets discretionary spending at $1.014 trillion for 2014, which will help to avoid partisan bickering over the budget during a congressional election year.  Offsets for spending increases above the sequester were achieved through recalculating federal work force pensions, requiring government employees to contribute more toward retirement and for extending the Medicare two percent provider cut for an additional two years (2022 and 2023).  While Democrats wanted much greater discretionary spending levels and were displeased that the savings comes off federal employees, some Republicans criticized the plan for allowing any increases in spending and for continuing to fund the Affordable Care Act.

 

The House of Representatives quickly moved to vote on the deal, approving the bill by a vote of 332-94 two days later on December 12, 2013.  The budget passed with a majority of votes from both parties (169 Republicans and 163 Democrats voted yes), which was key to giving Republican leadership the votes they needed without having to rely on tea party members for passage.  

 

The bill is now pending in the U.S. Senate, where passage may be more challenging, as many Senate Tea Party types (and potential Republican Presidential candidates) are lobbying heavily against passage.  Most policy experts expect that  it will pass within the next few days.

 

What has transpired, however, is not an appropriations bill – this is a budget agreement, which means the two chambers (and parties) have merely agreed to the top line spending numbers.  The House and Senate, as well as the President will still need to pass appropriations legislation before the end of the current Continuing Resolution, which ends on January 15, 2014.  It is most likely though that the next appropriation bill will be some type of Continuing Resolution or extremely shortened appropriation bill that will fund U.S. government operations until September 30, 2014.  Most would agree that the threat of another government shut down on January 15, 2014 has now been eliminated.

 

For those focused on individual programs, the impact that this budget legislation will have on specific services cannot be determined until Congress acts on appropriations legislation.  With the House and Senate soon adjourning for the holiday season, no further action will happen until they return in January, leaving only a few days to pass legislation.  Most programs should expect level or very minor increases.   Medicaid and Medicare remain untouched in this budget agreement, so the largest payers for health care services have been preserved.

  

 

No Grand Bargains

 

Earlier in the budget negotiation process, some experts were hopeful (or fearful depending on their perspective) that Congress would agree to some type of grand bargain as part of the budget package.  Scenarios that were floated around included some sort of tax reform package that eliminated tax loop-holes along with changes to entitlements such as Medicare that would have shifted more costs onto beneficiaries.  That possibility is pretty much dead now.  “I think the grand bargain, you know, that puts everything in a whole lot of tough votes on the table is impossible to find at this point,” Senator Patty Murray said on NBC’s “Meet the Press.”

 

For advocates for the poor, older adults, health care and social services, this agreement at least preserves what current federal government funding exists for their programs, with one very notable exception – there is no extension of unemployment benefits.  Given the current make-up of the House of Representatives, nobody should expect any continued extension of unemployment benefits.  Happy holidays.