Budget deal clears Senate, averting near-term shutdown threats

The Senate approved a two-year budget agreement Wednesday that will lift the threat of another government shutdown next month and undo $63 billion of the budget cuts mandated by the sequester.

The deal, brokered by Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., cleared the Senate by a margin of 64 to 36. Nine Republicans joined the 55 Democrats and Democratic-leaning independents in voting for the bill, which now heads to President Obama's desk for his signature.

Although the agreement cleared the House last week on a strong bipartisan vote, the outcome was less uncertain in the Senate. Many Senate Republicans honed in on a provision that gradually reduced the cost-of-living adjustments for working-age military retirees by 1 percent starting next December, until they reach 62 years of age. The measure will save the federal government $6 billion, savings that will be used in part to restore billions to the Defense budget.

Opposition grew even louder when Sen. Jeff Sessions, R-Ala., said he and his staff discovered the pension cuts would still apply to service members who and been wounded and were now disabled.

“It is unthinkable that this provision would be included in a deal that spares current civilian workers from the same treatment,” Sessions said.

Murray called it a “technical error” that “can, will and should be addressed,” when the Senate returns next year. Sen. Carl Levin, D-Mich., the chairman of the Senate Armed Services Committee, said he will revisit the entire issue of pension cuts – that don’t take place until 2016 -- after the bill expires.

The deal also requires new federal workers to contribute more to their pensions, though that measure was not as contentious. To raise additional revenue, corporations will have to pay more to the Pension Benefit Guarantee Corp. government contractor salaries will be capped at $487,000 annually, and security fees on airline tickets will rise from $5 to $11.20 for a typical round-trip ticket starting next July, among other things.

The deal was hailed by many in Washington as the first step in restoring normal order to a Congress that has been plagued by gridlock for years. When the two budget committee chiefs began negotiating the deal in November, there was little optimism they would be able to combine two budgets that display deep ideological differences, but were in reality just $91 billion apart on 2014 spending levels.

“It is what the American people have called for: a compromise. And that means neither side got everything they wanted and both sides had to give a bit. But I’m hopeful… that this deal can be a foundation for future bipartisan work," Murray said on the floor before the vote.

Though the symbolic victory may loom large, in reality, the deal is still a small step in tackling the issues that confront Washington.  Emergency unemployment insurance, which runs out on Dec. 28, was not extended, for example, and Senate Majority Leader Harry Reid, D-Nev., has said his chamber will take up the issue when they return in January. It also doesn’t touch tax reform, which Ryan said from the outset would have to be tackled by another bipartisan group. And the debt ceiling will still need to be raised in the first half of 2014, paving the way for a contentious fight.

President Obama still says a debt ceiling increase should not be conditioned on other policies, but Senate Minority Leader Mitch McConnell, R-Ky., has other ideas.

"I doubt if the House or for that matter the Senate is willing to give the president a clean debt ceiling increase," McConnell said Tuesday.