The budget deal in plain English
December 10th, 2013
10:26 PM ET
10 months 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. Mtheumer

    Oddly enough, I see nothing wrong with this budget.

    December 11, 2013 04:53 am at 4:53 am |
  2. Devon

    So if the government were a household. This family would again for the last 16 years decide to pay ALL their bill with a credit card and never pay it off.

    December 11, 2013 04:55 am at 4:55 am |
  3. basedonfact

    Wow what a huge concession limiting contractors pay to only 25% more than POTUS. Think they can get by on that?

    December 11, 2013 05:03 am at 5:03 am |
  4. James B. Neylon

    This actually may work and both sides finally learned to work together–I hope

    December 11, 2013 05:27 am at 5:27 am |
  5. Quixote

    Still insufficient domestic spending. Kind of hope the bagger nut cases hold this up because Democrats should have gotten a better deal for non military spending. Still, for the nation short term it is better than the constant hostage taking from the gop. Long run....people will forget how out of touch and irresponsible republicons are on the budget for next years elections. The country needs Democratic majorities in both houses of congress next year to get us moving forward again.

    December 11, 2013 05:39 am at 5:39 am |
  6. Bret

    Very well written. Is it a good thing Congress actually did something together? We will find out!

    December 11, 2013 05:44 am at 5:44 am |
  7. sweeper111

    There seems to be a lot left unsaid.

    December 11, 2013 06:06 am at 6:06 am |
  8. Richard Long

    You mean Congress was actually able to function and make a budget deal while Obama was out of the country?
    Coincidence?
    I think not.

    December 11, 2013 06:18 am at 6:18 am |
  9. George

    Looks like the Tea Party darlings were not able to keep their promises to voters.

    December 11, 2013 06:18 am at 6:18 am |
  10. Anonymous

    unemployment benefits

    December 11, 2013 06:20 am at 6:20 am |
  11. BO

    Here's one big reason why America's unemployment crisis may be here to stay. Thanks to the lasting effects of the recession, there are currently 4.7 million workers who have been out of work for at least 27 weeks. And new research suggests that employers will almost never consider hiring them.

    December 11, 2013 06:32 am at 6:32 am |
  12. sailor12

    It's about time they got off their dumps.

    December 11, 2013 06:32 am at 6:32 am |
  13. croaton999

    It's a welcome start.

    December 11, 2013 06:47 am at 6:47 am |
  14. GrandPaTx

    The budget deal in one sentence: It does nothing to reduce the debt of $17 Trillion.

    December 11, 2013 06:53 am at 6:53 am |
  15. William R. Hill

    Like they said, it's a start and not everybody will like it. Now watch the Congressional Jackals circle what little there is in the way of progress and pick it to pieces. Too bad so much politically motivated ideology gets in the way of anything resembling efficient national government.

    December 11, 2013 06:54 am at 6:54 am |
  16. Minnie Mouse

    Do something in plain English time because it's "Deal" or No Deal" before real time is over and the government shuts down again. There's good and bad in every plan. There's a budget plan easily outlined. People are talking and trying to compromise so make a deal before it's to late again.

    December 11, 2013 06:54 am at 6:54 am |
  17. DC Johnny

    This deal is no different than every other steaming pile that has come from Washington in the past decade.

    The supposed sequester cuts were so horrible – despite being fractions of a percent of the ever growing budget – that their effect had to be minimized and pushed back a decade.

    Future congresses are not forced to adhere to these planned budgetary maneuvers. Every year, those future congresses can determine their own budget. This means any proposed savings 10 years from now – or even two years from now – are simply smoke and mirrors.

    Paul Ryan is an embarrassment to the fiscal responsibility he used to maintain just a few short years ago. An embarrassment to his own legacy.

    We need a state convention for nominating amendments to the Constitution and we need it 10 years ago.

    December 11, 2013 07:03 am at 7:03 am |
  18. Retired military

    Really? Cut COLA for military retirees by 1%? So if the COLA rate for 2014 is 1.5% it would end up as .5% (probably doesn't affect 2014 since they say it's phased in over 3 years) which means our retirement becomes worth less each year before we reach 62 years of age. Not a nice approach but what balance did they use against the politicians and their staffers retirement benefits?

    December 11, 2013 07:03 am at 7:03 am |
  19. Bill

    Messing with COLA will sting. Military members should expect a lot less in retirement. CPI – 1% until age 62. Wonder how this will work with the guys that took REDUX/CSB??

    December 11, 2013 07:05 am at 7:05 am |
  20. Jack

    I bet the GOP got what they wanted for big fat Defence contractors. This reducing the budget is a shame started by the GOP. Yes there are limited dollars however the GOP sees and knows very well that the baby boomers are reaching age and are looking to get back what they paid in. With that said that means less money for the fat sucking defence contracti cows and their super rich investors, so the fight is on and the facade is just that, done well by the GOP and the very rich.

    December 11, 2013 07:14 am at 7:14 am |
  21. YeahRight

    The budget deal in 4 words:

    TAX MOAR! SPEND MOAR!

    December 11, 2013 07:18 am at 7:18 am |
  22. BADGUY

    WHEN are we going to start cutting all the military bases, around the world....including all those bases in Red States? Most of those bases are just "make work" centers, setup over the last 70 years by high seniority, southern Congressmen, to provide a livelyhood for their consitutents. Better we hire people to rip apart the Hoover dam...then rebuild it. At least, they'd be learning some valuable skills we sorely need with our deteriorating infrastructure.

    December 11, 2013 07:19 am at 7:19 am |
  23. JY

    The Death Master File, another good source of data the government has that is not shared within the government that WOULD stop some fraud in their tracks. Why all government entities that issue checks do not simply get the data file of dead social security numbers and check against this data before issueing a check. In any programming language it is as simple as storing the entire file, indexing by the unique key, social security number, reading the file with the social secuirty number getting a check, if the social security number is on the file, don't issue the check, issue an arrest warrent. In any applications this logic would take 1 day to code, test and implement for any competent programmer, except it would be a government contractor doing the work, which would take 1 year with 15 people and cost 30 million dollars then not work.

    December 11, 2013 07:34 am at 7:34 am |
  24. Ken

    Smoke and mirrors is all it is! The old clique: It is easy to spend other people's money.

    December 11, 2013 07:45 am at 7:45 am |
  25. Larry

    In other words, they really did nothing to reduce the deficit

    December 11, 2013 07:46 am at 7:46 am |
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