Earlier this week, Congressman Ryan and Senator Murray put together a budget deal that should stave off another government shutdown for quite some time. It was passed by the House tonight and will likely go through the Senate tomorrow. Here are the details. The basic gist is that half of the sequester for 2014 is cancelled for a spending hike of $40 billion, mostly in military spending. A quarter of FY 2015’s sequester is cancelled as well. These are paid for by increasing employee contributions to federal pensions, increasing some user fees and not delaying Medicare’s SGR cuts, which will cut doctor’s fees by a quarter if they go into effect, with a likely damaging effect on Medicare. In addition, unemployment benefits will not be extended which means over a million people will lose them starting in January. Overall, the deficit will go down about $20 billion more than it would have before, but that may change if Congress changes its mind on SGR.
It’s not the worst deal ever, but it’s not a good deal and it’s not the deal we needed. It has no desperately needed fixes to the tax code. It decreases the deficit mainly through little tweaks here and there. It has no changes to entitlements or mandatory spending at all. That was what the Republicans needed to get if they were going to cave on sequestration and they didn’t.