Negotiators Announce FY 14 Budget Deal

On Tuesday, December 10, House and Senate Budget negotiators announced a deal to replace $63 billion in sequestration cuts in fiscal years 2014–2015 with $85 billion in deficit reduction. The package includes cuts to some programs; tightening eligibility or eliminating waste, fraud and abuse from others; and increased revenue from fees associated with government programs. (See the House Budget Committee’s summary for details.)

These changes are to be implemented over the next decade, producing a net deficit reduction of nearly $23 billion. In addition, budget caps enforcement through sequestration will be extended 2 more years to FY 2023. Under the agreement, the FY 2014 spending level would be set at $1 trillion, splitting the difference between the spending levels approved by the House and Senate Budget Committees. The agreement permits spending on various non-defense discretionary programs including science funding to rise by a total of $22 billion over the level permitted under the Budget Control Act of 2011.

The agreement was announced in a joint press conference by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA). This was clearly part of the effort to build bipartisan support for the agreement are encouraging: House Budget Committee Chairman Ryan characterized the agreement as a “smarter way” to achieve deficit reduction, and House Majority Leader Eric Cantor (R-VA) said in a statement that it was “a step forward consistent with prior Republican attempts to replace the sequester’s indiscriminate across-the-board cuts.” At the press conference, Murray said the 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.” President Obama also endorsed the agreement and called upon Members of Congress from both parties to “take the next step and actually pass a budget based on this agreement.”

The House was expected to vote on the proposal before its scheduled adjournment on Friday, December 13. Given the possibility of opposition from hardline deficit hawks and democrats who want to see unemployment benefits extended, passage cannot be taken for granted. However, if the House approves the measure, the Senate will take it up next week. If the budget agreement is adopted, the House and Senate Appropriations Committees will have until the current continuing resolution expires on January 13 to write funding legislation for the remaining 9 months of the 2014 fiscal year.