By Judith Ugwumadu | 11 December 2013
US budget negotiators have resolved the political gridlock in Washington and reached a two-year deal that would avoid a repeat of another government shutdown.
Yesterday, the cross-party Congressional budget committee formed in the wake of the October shutdown, announced it had agreed and budget deal that will provide $63bn in sequester relief over the next two years, offset by $85bn in spending cuts. The budget committee had until December 13 to come up with a new deal or face triggering another automatic spending cut.
President Obama said the deal was ‘a good first step’ but added: ‘This agreement doesn’t include everything I’d like – and I know many Republicans feel the same way. 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 $63bn sequester relief is to be split evenly between defence and non-defence programmes. Assuming passage of the Bipartisan Budget Bill, overall discretionary spending would be set at $1.012 trillion for the current fiscal year – roughly halfway between the budget level of $1.058trn set by the Democrat-controlled Senate and the $967bn demanded by the Republican-dominated House.
Together with the $85bn in savings, the agreement is expected to carve between $20bn and $23bn out of the US’s $17trn debt.
Among the measures included in the cuts package are an end to unemployment benefits for prisoners, repeal of a government research programme for private energy companies and a requirement for federal government workers to increase their pension contributions.
Republican Congressman and House Budget committee chair Paul Ryan said: ‘I’m proud of this agreement. 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 my colleagues in the House to support it.’
Democrat Senator Patty Murray, who chaired the Senate Budget Committee, added: ‘This agreement breaks through the recent dysfunction to prevent another government shutdown and roll back sequestration’s cuts to defence and domestic investments in a balanced way. It’s a good step in the right direction that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.’
Obama said Congress now needed to take the next step and pass a budget ‘so I can sign it into law and our economy can continue growing and creating jobs without more Washington headwinds’.
The House of Representatives is expected to consider the Bipartisan Budget Bill first, followed by the Senate. If signed into law, the appropriations committees will then be able to work on spending bills at an agreed-upon level in advance of the deadline on January 15.
