Republicans and Democrats Announce Budget Deal

J. Scott Applewhite/AP

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The $1 trillion agreement would provide approximately $63 billion in relief from sequestration, split evenly between defense and non-defense programs. By Tim Alberta, Billy House and Sarah Mimms

Budget negotiators on Tuesday night announced they’ve reached a two-year deal that sets spending for the current fiscal year at $1.012 trillion and would provide $63 billion in sequester relief—all without new tax revenue.

I’m proud of this agreement,” said Republican Rep. Paul Ryan, one of the two principal negotiators, in a statement shortly before an evening news conference. ”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.”

Sen. Patty Murray, who handled the negotiations for Democrats, said, “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.”  

The deal, being dubbed the Bipartisan Budget Act of 2013, will still have to get the go-ahead of rank-and-file lawmakers in both parties. The House is set to adjourn at the end of the week, and Republicans there are expected to meet behind closed doors Wednesday morning, as their leaders eye a floor vote by Friday.  

The proposed package would set overall discretionary spending annualized for the current fiscal year at $1.012 trillion. That’s about midway between the level of $1.058 trillion proposed in the Senate’s budget, and the House-proposed budget level of $967 billion.

The deal would bring fiscal 2015 spending to about $1.014 trillion. The plan does not deal with the debt ceiling, which is anticipated to be reached sometime after Feb. 7.

The agreement also would provide $63 billion in sequester relief over two years, split evenly between defense and nondefense programs. In fiscal 2014, defense discretionary spending would be set at $520.5 billion, and nondefense discretionary spending would be set at $491.8 billion.

In fiscal 2014, defense discretionary spending would be set at $520.5 billion, and nondefense discretionary spending would be set at $491.8 billion.

The sequester relief is described as being fully offset by savings elsewhere in the budget.

(Read more about the ongoing budget debate in Washington here)

The agreement includes dozens of specific deficit-reduction provisions, with mandatory savings and non-tax revenue totaling roughly $85 billion, although details of how these savings would be realized were not immediately released. The agreement would reduce the deficit by between $20 billion and $23 billion.

Some conservatives have recently voiced opposition to swapping out sequester cuts for “user fees,” while liberals have criticized any deal that does not extend unemployment insurance.

A potential major sticking point for some lawmakers could be that one measure being used to help pay for added spending is increased premiums for pension plans backed by the Pension Benefit Guaranty Corp.

However, the package also does not include an extension of unemployment benefits, due to expire at the end of December—something Democrats have been championed.

Rep. Steve Israel, chairman of the Democratic Congressional Campaign Committee, said Tuesday afternoon that he can’t say whether House Democrats will be on board.

We’re still feeling our way through this,” he said. “Some of the components may be a hard sell for House Republicans. So, we need to find out where they are, and where we are.”

House Republicans have let it be known they have a contingency plan in place.

Part of our conversation was on the short-term piece,” Rep. James Lankford, the Republican Policy chairman, said Tuesday afternoon. “If this [budget] deal doesn’t pass, we’ve got to have a short-term piece ready to get together and get out there.”

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