WASHINGTON — After months of inaction, congressional negotiators moved with surprising speed in announcing a budget deal late Tuesday that would restore tens of billions of dollars to defense and non-defense programs removed by the cuts known as sequestration.
The deal was unexpectedly bold — not only is it a two-year deal, instead of only one, but also it proved wrong the conventional wisdom that the forced spending cuts were here to stay. Instead, it restores money that Pentagon leaders had said they desperately needed if the nation’s military was to maintain its readiness and capability.
Not all sequestration funds are restored; the deal puts back about half of sequestration’s cuts in 2014, and about a fourth of them in 2015.
The deal was struck between House Budget Committee Chairman Paul Ryan, R-Wis., and his Senate counterpart, Patty Murray, D-Wash. It replaces $63 billion in money that was cut earlier this year, split evenly between defense and non-defense agencies. The Defense Department will get back about $22.5 billion in the 2014 fiscal year and another $9 billion in 2015.
Without this deal, the agreement reached in October to end the then-16-day government shutdown and avert a debt ceiling default would have ended, risking another shutdown and automatically triggering tens of billions of dollars in sequestration cuts as mandated by the 2011 Budget Control Act. The Pentagon itself would have lost as much as $50 billion. Ryan credited Pentagon officials with heavily influencing the budget negotiations and restoring at least some of the spending cuts.
The agreement is separate from the full fiscal year 2014 defense bill, known as the National Defense Authorization Act, but it does impact the Pentagon by restoring a large chunk of the sequestration cuts.
Senate Majority Leader Harry Reid, D-Nev., praised the deal in remarks late Tuesday night.
“We have numbers now,” Reid said. “I’m very pleased the budget negotiators Murray and Ryan have come up with an agreement today that will roll back the painful and arbitrary cuts of sequestration and prevent another costly government shutdown.”
Reid did not announce a vote yet on the budget deal, but Ryan said he expects the House to take up the bill later this week and the Senate to vote next week. That timing is uncertain, as the House is scheduled to adjourn Friday and both chambers still have to vote on the FY 2014 defense bill as well as a variety of other must-pass pieces of legislation.
Both Democrats and Republicans were left wanting more from the deal. The GOP praised the fact that it does not raise the debt ceiling, but was frustrated that it does not address entitlement reform. Ryan and Murray chose early on in their talks to avoid striving for any such “grand bargain” that would threaten a more modest deal.
Democrats decried the fact that the deal does not extend unemployment benefits, which expire Dec. 31, and that federal workers hired after Dec. 31, 2013, will have to contribute 1.3 percent more to their retirement funds.
Military advocates are left wanting, too: Veterans who retire from the military before age 62 will see a reduction in their annual cost-of-living benefit increase. Retirees 62 and older, and those retired on disability, would not be affected.
“It was a compromise,” Reid said. “We didn’t get what we wanted. They didn’t get what they wanted. But that’s what legislation is all about, working together. ‘Compromise’ is not a bad word.”
Both Ryan and Murray cautioned the deal is just a “first step.”
“This bill reduces the deficit by $23 billion, it does not raise taxes, and it cuts spending in a smarter way,” Ryan said.
Murray said the deal “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,” Murray said.
President Barack Obama joined a variety of congressional leaders who issued statements applauding the agreement.
“This agreement doesn’t include everything I’d like — and I know many Republicans feel the same way. That’s the nature of compromise,” he said. “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.”