Federal Budget Deal Likely to Pass – But What Does It Mean?

Chart produced by Center for American Progress

Chart produced by Center for American Progress

Last week, the U.S. House of Representatives overwhelmingly voted to approve the bipartisan budget agreement reached by Rep. Paul Ryan and Sen. Patty Murray, and the Senate is expected to vote to pass this deal as soon as Tuesday, Dec. 17, in time for members of Congress to head back to their home states for the holiday recess.

As with any compromise between parties prone to disagreement, this deal isn’t perfect. But here is what is included in the Bipartisan Budget Act of 2013:

  • Avoids $63 billion in cuts that were scheduled as part of “sequestration” for 2014 and 2015, divided evenly between defense and non-defense (programs for children, seniors, health and human services, etc.) discretionary spending
  • Avoids cuts to mandatory entitlements, such as Medicaid and Social Security, that are critical supports for low-income families and senior citizens
  • Greatly reduces the likelihood of another government shutdown, allowing Congress to return to the normal budgeting and appropriations process

Unfortunately, the budget deal does fall short in several areas. It fails to address Extended Unemployment Compensation, which is scheduled to expire Dec. 28 unless Congress acts to extend this critical lifeline. Approximately 1.3 million workers are due to lose their emergency benefits immediately, and an estimated 4.9 million workers will lose their benefits by the end of 2014 if Congress lets them expire. The deal also does not close any tax loopholes that primarily benefit largely corporations. It is also important to point out that this budget agreement sets discretionary spending levels below the amount originally put forth in Rep. Ryan’s proposed budget for FY2013.

It is a positive sign, though, that members of Congress on both sides of the aisle are taking steps to reduce the harm caused by sequestration – for instance, the Congressional Budget Office estimated that about 750,000 more full-time jobs would have been created or retained in 2013 if sequestration never took effect. What’s more, the budget deal accomplishes this without putting more financial strain on low-income Americans, who were hit especially hard when sequestration took effect.

Here’s what happens next: The Senate will very likely pass this bill. Then, with the spending levels agreed upon, the Appropriations committees in the House and Senate will be able to get back to their usual duties of passing appropriation bills, or possibly a single “omnibus” bill, to fund the government. Their deadline to do this is Jan. 15, when the current funding will run out. Chairs of the House and Senate Appropriations committees have both lauded the budget deal, and feel optimistic about passing spending bills to avert another shutdown.

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About National Community Tax Coalition

National Community Tax Coalition (NCTC) is the nation's largest, most comprehensive membership organization for community-based organizations offering free tax and financial services to low-income working families.

Posted on December 17, 2013, in NCTC and tagged , . Bookmark the permalink. Leave a comment.

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