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Factbox: Highlights of a modest U.S. budget deal
December 19, 2013 / 12:01 AM / in 4 years

Factbox: Highlights of a modest U.S. budget deal

(Reuters) - The two-year U.S. budget deal approved by the U.S. Congress Wednesday gives both Democrats and Republicans something to brag about, starting with the mere fact that they did it.

A man walks past the U.S. Capitol Building in Washington December 17, 2012. REUTERS/Joshua Roberts

Congress had not approved an annual budget measure since 2009 amid seemingly intractable partisan divisions over fiscal policy and brinkmanship that has plunged congressional approval ratings to new lows in public opinion polls.

The votes in both the House and Senate were bipartisan, 332-94 in the House last Thursday and 64-36 in the Senate on Wednesday.

Republicans can say they did not increase taxes and found additional ways to reduce the deficit. Democrats can say they found relief from forced spending cuts on education and other domestic spending programs, while avoiding major changes to Medicare and Social Security benefits for the elderly. And both sides can say they helped the military avoid deeper cuts.

But airline travelers, newly hired federal employees and some military retirees will lose out in the agreement.

The deal sets federal spending levels for two years and its proponents argue that it will help Congress quell its budget warfare through at least October 1, 2015.

The following are major components of the agreement negotiated by Republican Representative Paul Ryan and Democratic Senator Patty Murray:


It blunts the effect of the already enacted across-the-board cuts by allowing spending on federal agencies and discretionary programs to rise by $63 billion over scheduled levels - $45 billion in fiscal 2014, which began on October 1, and $18 billion in fiscal 2015. The spending relief is split evenly between domestic and military programs.


The deal sets discretionary spending levels at $1.012 trillion for fiscal 2014, up from the $967 billion level that included the full effect of the automatic “sequester” spending cuts approved as part of a temporary budget deal in 2011. Military spending is set at $520.5 billion, avoiding a $20 billion additional cut in January, while domestic spending is set at $491.8 billion.

For fiscal 2015, the discretionary spending is set at about $1.014 trillion, up from $995 billion scheduled under the sequester cuts.


In addition to the $63 billion in sequester relief, the deal will provide an additional $20 billion to $23 billion in deficit reduction, spread over 10 years, through a combination of lower government benefits, spending cuts and higher revenues. Ryan believes the additional savings will help secure Republican support for the plan when it reaches the Senate, overcoming objections by some conservatives that the plan would violate spending caps imposed under the sequester cuts.


The deal finds $12 billion in savings through changes to retirement programs for federal employees and working age retired military service members. Federal employees hired after January 1 will contribute an additional 1.3 percent of their pay toward their retirement benefits for the first five years of their employment. Scheduled cost-of-living adjustments for military retirees will be reduced for those younger than 62 - a provision that upset both Republican and Democratic senators who pledged to try to change the plan before it goes into effect in 2015


The deal will increase the airport security fees paid by airline passengers to the Transportation Security Administration to $5.60 per one-way trip from as low as $2.50 for a single flight leg, which will generate $12.6 billion over 10 years.


The sequester cuts, put in place under a 2011 budget deal, are scheduled to end in 2021. But the deal extends for two years the portion of the automatic cuts assigned to mandatory spending programs, including portions of the Medicare health program for the elderly. Extending these cuts to 2022 and 2023 saves $28 billion over 10 years.


The deal includes a number of items related to natural resources, including canceling a deep-water resources research program at a savings of $40 million and rescinding funds available in the Strategic Petroleum Reserve for a $3.2 billion savings.

It also reduces certain fees and payments to entities that guarantee and service student loans, saving $5.1 billion,

It raises the premiums that private companies pay the federal government to guarantee pension benefits, contributing $7.9 billion over 10 years, and allows the Bureau of Customs and Border Protection to keep collecting user fees through 2023, for $6.8 billion in budget savings.

Another provision saves $786 million by charging user fees for access to a Social Security Administration database of deceased individuals.


The deal left out a number of items considered important in the overall budget debate:

* An extension of long-term unemployment benefits due to expire on December 31 for about 1.3 million jobless Americans.

* Increased revenues sought by Democrats from the elimination of certain tax deductions and credits for wealthy individuals and large corporations.

* Major cuts to federal benefit programs sought by Republicans, who cite the growth of Medicare, Medicaid and Social Security as the major source of long-term budget problems.

* A plan to increase the federal debt limit. An extension of the $16.7 trillion debt limit expires on February 7 and if it is not raised, the United States will likely run the risk of a debt default by the spring of 2014.

Reporting by David Lawder; Editing by Vicki Allen

Our Standards:The Thomson Reuters Trust Principles.
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