Bi-Partisan Thaw? Congress Nears 2-Year Budget Deal

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In a sign that the fierce bi-partisan tensions that have divided the U.S. Congress since President Barack Obama’s first election are easing, Republican and Democratic negotiators in Congress have announced a sweeping budget compromise that will fund the U.S. government for the next two years. The deal will suffer sequester effects and increase spending in the short-term, while including measures to reduce the deficit over the long-haul.

Current plan a modest one compared to others

Unlike past negotiations, the current plan abandons the grand plans sought by both parties. In the past, the differing visions of what exactly should constitute this grand plan have kept both parties divided. The fallout of previous budget battles, however, has seriously undermined America’s image on the global stage, while American citizens themselves have grown increasingly impatient. With Congress’s domestic approval ratings hovering at all-time lows and the international arena growing increasingly complicated, Congressional leaders appear to have decided that it is time for a change.

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Under the previous sequester law, the U.S. budget would have been cut to $967 billion dollars in 2014, but under the new law spending will rise modestly to $1.012 trillion dollars. Spending will rise to $1.014 trillion dollars in 2015. Spending increases will focus both on domestic programs and the military, helping to alleviate the sequester-driven fears of both parties.

Bi-partisan disagreements threatening to destabilize the U.S.

The so-called Murray-Ryan deal represents one of the largest compromises between Democrats and Republicans in recent years. Paul Ryan’s support may prove to be crucial as in the past he has been one of the strongest opponents of moderate compromise. With bi-partisan disagreements threatening to destabilize the United States once again, however, Mr. Ryan has stepped up to lead the most recent round of negotiations.

The deal has not been passed yet, but many believe that it will be able to muster the support necessary to pass both the Senate and the House. The vote will likely be closer in the House and will require strong support from the Democrats. While Republicans control the House, far right and Tea Party members of Congress will likely oppose the measure, with many feeling that the sequester should be left in place. Already, 20 conservative leaders have signed an open letter announcing that they will oppose any agreement that includes spending increases.

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Leaders in the Democratic party have already acknowledged that they will have to carry the vote in the House. Easing the sequester, however, should be enough to gain support from Democrats. Still, with Ryan’s support, the bill should be able to gain enough Republican votes that it will pass. The bill appears to have stronger support in the Senate, which has not been as heavily impacted by the Tea Party movement. Still, there are risks in the Senate as Republican minority leader Mitch McConnell has previously announced that spending should not be increased.

Details of the Murray-Ryan plan

The deal contains only moderate deficit reduction measures. It will decrease the deficit by $85 billion dollars over the next 10 years, creating a net deficit reductions of $22.5 billion dollars. The deal will continue and actually extend the 2% Medicare payment cuts, which were set to expire in 2021. Now the cuts have been extended to 2022 and 2023.

Several major decisions, however, have not yet been reached. Congressional leaders have not yet decided whether or not emergency unemployment benefits will be extended for the roughly 1.3 million people who currently depend on them. Airline fees will be increased, however, and increases for military will also be cut. Federal pensions will also likely be reduced by $6 billion dollars. Airline fees will also be increased.

President Obama has gone on record supporting the deal and calling it a good first step, and has urged Congress to act in order to avoid another shutdown. If the agreement gains traction and ultimately passes, the United States should be able to avoid another costly and embarrassing budget battle for at least two years. If the agreement fails, however, conditions may only grow more turbulent as both sides dig in.

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