Washington, DC, United States (4E) – The chairs of the House and Senate Budget Committees announced Tuesday a federal spending agreement for 2014 and 2015 in a compromise that could avert another government shutdown in January.
The deal sets the budget for the Pentagon and other federal agencies at $1.012 trillion next year instead of the House-backed $967 billion with the automatic spending cuts known as sequester in place, according to Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.). Military spending would be set at $520.5 billion this fiscal year, while domestic programs would get $491.8 billion under the deal.
The deal also sets the budget at $1.015 trillion for fiscal 2015.
The deal replaces $63 billion of sequestration cuts with fee increases for airline travelers, cuts to federal-worker and military pensions and increased federal worker retirement contributions. The spending cuts and non-tax revenue spell $85 billion in savings and about $23 billion in net deficit reduction.
Ryan said the House will approve the deal.
House Speaker John Boehner (R-Ohio) issued a statement approving the deal he described as modest in scale but a positive step forward because it “replaces one-time spending cuts with permanent reforms to mandatory spending programs that will produce real, lasting savings.”
The deal lacks the Democrats’ proposed extension of emergency unemployment benefits, which expire on Dec. 28 and includes the disliked $6 billion in deficit reduction at the expense of federal workers, who will have to contribute more to their pension funds. But Senate Majority Leader Harry Reid (D-Nev.) said the fiscal compromise was better set through the regular order of the budget process than through hostage taking or crisis making.