The budget deal in plain English
December 10th, 2013
10:26 PM ET
1 year ago

The budget deal in plain English

Washington (CNN) – Hey! Republicans and Democrats agreed on something! Woo hoo… er, whoa. What is this deal, exactly? The summary is written in Washington-speak. To make it easier, here’s our user-friendly version of highlights and what they mean.

The money: The deal sets the government’s spending level at $1.012 trillion for the current fiscal year and $1.014 trillion for next year. So what? Keep reading.

Budget cuts: Here’s the first reason the deal matters. Those spending levels would eliminate $45 billion in forced budget cuts (yes, “sequester”) set to hit in January and another $18 billion set to hit in 2015. It would not eliminate all of the cuts, but would erase a large chunk of them.

Wait, so does it raise spending?: Hang with us here. Simple question, not-so-simple answer. The deal would raise one kind of spending – discretionary spending – for the next two years. That’s the type of spending Congress votes on each year. It funds many government agencies. But the deal more than offsets that two-year spending increase with long-term cuts to a different type of spending – mandatory spending, or spending that happens automatically under the law. So over 10 years, the deal saves money, its writers say.

Airline fees: If you plan to take a trip , buy your tickets now and save a few bucks. The Ryan-Murray agreement would raise the TSA security charge to $5.60 for any one-way trip.  So $11.20 round trip.  Currently, the so-called "9-11 fee" is $2.50 for a nonstop flight and $5 for travel that involves connecting flights.  The deal would charge the same $5.60 regardless of whether the flight plan was nonstop or not.

Federal workers: This was one of the most difficult pieces of the deal to work out. In the end, the deal requires that newly hired federal workers pay more into their pension fund. The change means that new federal workers would see a 1.3% pay cut.

The troops: Military retirees under the age of 62 will face slimmer cost-of-living increases in their retirement pay. This is phased in over three years, but ultimately cost-of-living adjustments, or COLA, will be cut by 1%.

Contractor pay: Bad news for contractors who charge the government $488,000 or more for their salaries. The deal caps what the government will pay for a contractor’s salary at $487,000.

More budget cuts, later: The deal may roll back much of the sequester during the next two years, but it extends forced budget cuts for two new years on the back end, into 2023 and 2024.

Oddball proposals: The deal contains more than a dozen other assorted provisions, a kind of nickle-by-nickle, rag-tag collection. Here are some that especially stand out.

The Death Master File: Cue the Star Wars’ Imperial March music here. Turns out the Department of Commerce keeps something called the “Death Master File,” which lists people who have died and their Social Security numbers. The budget deal would block fraud (checks going to dead people, essentially) by limiting access to the death list and raising penalties for misuse.

Prisoners shouldn’t get unemployment checks: The deal aims to block prisoners from getting government checks the law bans, like unemployment benefits, by increasing the coordination of prisoner lists.

Student loan companies: This isn’t sexy, but it is worth $3 billion, according to House Budget Chairman Paul Ryan’s office. The deal would take away automatic payment for non-profit student loan servicers, replacing it with payment that Congress determines yearly. Told you it wasn’t sexy.

Pension guarantees: And, it gets even more wonky - but also more lucrative. The federal government runs a program that guarantees the pensions for companies that participate, sensibly called the Pension Benefit Guaranty Corporation. The deal saves an estimated $7.9 billion by asking the companies to pay more money for that guarantee.

Gas and oil: The deal would make two changes that energy companies won’t like. It ends a government research program that Ryan’s office says was for private energy companies. It also ends a provision that allowed energy companies to stash funds in government accounts and earn interest above market rates.


Filed under: Budget • Congress
soundoff (142 Responses)
  1. Jeff Brown in Jersey

    If the GOP agreed to it, it SUCKS!

    December 10, 2013 10:44 pm at 10:44 pm |
  2. California

    SO the sequester turns out to be a political clown act. Why did everyone whine about it then?

    December 10, 2013 10:53 pm at 10:53 pm |
  3. HenryMiller

    "Those spending levels would eliminate $45 billion in forced budget cuts (yes, “sequester”)..."

    Utterly unacceptable, and I have so advised my Congresscritters.

    December 10, 2013 11:15 pm at 11:15 pm |
  4. bros

    Blocking access to the Death Master File is just a horrible thing to do – it is an incredibly useful genealogical tool to trace ancestors born in the 20th century who were working when the social security system was implemented.

    December 10, 2013 11:15 pm at 11:15 pm |
  5. mjd

    better. it's a start. keep working together and you will succeed. the market will like this news!!

    December 10, 2013 11:23 pm at 11:23 pm |
  6. pdy

    What youhave not talked about is the Unemployment extensions for the unemployed.

    December 10, 2013 11:31 pm at 11:31 pm |
  7. Coffee Party

    This one right here made me so happy:

    "Contractor pay: Bad news for contractors who charge the government $488,000 or more for their salaries. The deal caps what the government will pay for a contractor’s salary at $487,000."

    It's a good first step. Private crony contracts were being used to transfer our tax dollars to rich buddies of the Congress. Who in return would give the politicians kickbacks in campaign contributions. It was wealth distribution to the top that neither party discussed.

    Now we need to cut down on the number of private contracts we give to these crooks.

    December 10, 2013 11:34 pm at 11:34 pm |
  8. mike

    And this is all they could come up with??? We need real budget cuts... Im sick and tired of seeing my country spend more than it brings in... Live within our means!!!

    December 10, 2013 11:35 pm at 11:35 pm |
  9. Rick McDaniel

    Ii is still an increase in spending, and the existing budget is outrageous. It will increase the deficit by another trillion dollars, to 18 trillion.

    December 10, 2013 11:36 pm at 11:36 pm |
  10. me

    Airline fees: Buy your tickets now and save a few bucks. The deal would essentially double the TSA security fee for most air travel starting January 1. For a one-way flight, the fee would go from $2.50 to $5. Roundtrip, it would move from $5 to $10. so now were paying twice as much to get molested? lol

    December 10, 2013 11:42 pm at 11:42 pm |
  11. Name Uche Agonsi

    Two lines of thoughts the budget deal seemed to have corrected are, the Repubs belief the legislative logjam is more beneficial to their party than cooperation, and the idea that balancing the budget in era of expectant continued recession and unemployment would benefit Americans more in future than a budget crafting based strategic considerations. However, I still get the feeling that the budget did not discourage export of US jobs/technology, neither did it install measures to narrow the expanding rich/poverty gap.

    December 10, 2013 11:44 pm at 11:44 pm |
  12. Leonard Nix

    Remember, the federal government creates/spends money by simply crediting bank accounts. The federal government cannot "save money". When it spends less, that simply means it is not creating as much money. If the economy is "hot" and unemployment is low, that is the right policy. If the economy isn't so hot, and unemployment is high, then it may not be the right policy.

    December 11, 2013 12:29 am at 12:29 am |
  13. IndependentVoter

    This is a reasonable step in the right direction, now all we need is a reformed tax code to close the loopholes, stiffer fines on companies, either thought direct tax of the company or through tariffs, that send American jobs overseas, and the last part, which some would consider ironic because i am a veteran, reduced spending for the DoD, start drawling the troop numbers down to their Pre 9/11 levels.

    December 11, 2013 12:38 am at 12:38 am |
  14. Sakura

    can we please get budget cuts for our bloated military pleaes

    December 11, 2013 12:50 am at 12:50 am |
  15. iconoclast1

    Good for them. They agreed to a deal. That's a step in the right direction.

    December 11, 2013 12:53 am at 12:53 am |
  16. John Steitz

    From what I read here this is stupidly liberal. They obviously are not taking the deteriorating condition of the country serious. We need cuts not dishtowel adds. Eliminate entire redundant Federal departments. The states can deal with their own populations. Cut military spending. Cut Nation building exercises. Cut aid to other countries. Bring the bankers of this country who created this mess to justice. I want bankers in jail. End the Fed it is only an arm of the bankers.

    December 11, 2013 12:58 am at 12:58 am |
  17. Mofungo

    Another crushing loss for Ted Cruz and the Tea Party crew who have gone all in trying to bring America to a standstill.

    December 11, 2013 01:35 am at 1:35 am |
  18. helen beed

    I think congress should cut their pay. when it come to the budget it always hurt the work man or women and the low income and the senior. How would they like on a fix-income and when it come to raise forget.

    December 11, 2013 02:07 am at 2:07 am |
  19. eddhur

    doesn't matter to me what they do i will have to take it so i will keep my focus on what i can help

    December 11, 2013 02:08 am at 2:08 am |
  20. Dwayne

    Didn't mention food stamps or unemployment benefits.

    December 11, 2013 02:59 am at 2:59 am |
  21. Tealiban is antiAmerican

    You mean to tell me that Paul Ryan, a republican, is actually trying to get something done for once besides criticizing President Obama 24/7 and maintaining gridlock?
    This MUST be a hoax!

    Then on second thought, this was a smart move by Ryan or any other repub who has aspirations of a higher office. Any of them who remain "teathered" to the TP and does not distance themselves from them has no change of success, ever again.

    December 11, 2013 03:13 am at 3:13 am |
  22. Valentina

    Not enough details about the budget reached .

    December 11, 2013 03:30 am at 3:30 am |
  23. blackcheap

    make sure these contacts are given out to the right people. to many jobs being left on done!! the bids may be set with some kickback but get the job done that's all we ask.

    December 11, 2013 04:08 am at 4:08 am |
  24. Ric H

    Now isn't this wonderful, albeit evidently unthinkable if you analyze the last 6 years of legislative records! A bi-partisan effort that comes up with sensible ideas, possibly even good results, and nothing particularly offensive or risqué'! See... that didn't hurt a bit now, did it?!? I know most politicians don't believe what I am about to say, but this kind of effort (and hopefully results) is far more likely to guarantee their re-election than pandering to the extremes or the minutia of constituents who happen to like funding extremist campaigns! I’ll give this a slightly reserved bravo, with a hearty “encore!!!”

    December 11, 2013 04:14 am at 4:14 am |
  25. Harleigh

    Who cares about the plain English! All we want is the truth.

    December 11, 2013 04:52 am at 4:52 am |
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