On Tuesday, the budget conference committee — established as part of the stopgap deal that ended the 16-day partial government shutdown in October — proposed a decidedly modest and surprisingly agreeable budget deal that would, if passed, set federal spending levels for a full two years. Co-chaired by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), the deal is a welcome show of cross-aisle cooperation from a Congress that has earned itself record low approval ratings.
Perhaps the most significant thing about the deal is that it is palatable to both parties. Ostensibly exhausted by political warfare, negotiators sought the path of least resistance and concocted a ceasefire so modest that it only appears to offend only the relatively radical members of Congress. The ingredients — relief from spending cuts, no new taxes, a dash of deficit reduction — all speak to the kind of fiscal responsibility that is needed right now.
The deal provides for $63 billion worth of relief from the sequester over two years ($45 billion in fiscal 2014 and $18 billion in fiscal 2015), split evenly between military and domestic programs. This is something that appeals to Democrats and which many Republicans can tolerate. The deal is also seasoned with between $20 billion and $23 billion in additional deficit reduction spread over 10 years.
Both parties gave a little and both parties got a little, and the net effective appears to be a fairly competent step in the right direction. To some observers, though, despite being an encouraging show of cooperation, the deal is bland — smart, all things considered, but bland.
As mentioned, the deal provides only $23 billion in net deficit reduction. The federal fiscal 2014 discretionary spending level would be set at $1.012 trillion and at $1.014 trillion for fiscal 2015. Given the enormity of the numbers involved, it’s hard to get excited about the changes.
What is worth pointing out is the nature of the cuts. The sequester has often been criticized as a blunt tool, and the proposal on the table now is much more refined. Changes to federal retirement programs, for example, will only impact new hires as opposed to existing personnel, and changes to military benefits won’t affect the elderly or disabled. The deal also seeks to increase revenue by increasing the fees the Transportation Security Administration charges airports and the rate charged to companies to insure their pension benefits.
President Barack Obama has stated his support for the measure.