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

    What this article leaves out is one of the major programs "spared" that was to be face automatic spending cuts is the MILITARY WASTE PROGRAM. Because it is our SINGLE BIGGEST WASTE of taxpayer money, next to inflated lifetime pensions for government workers who again includes military, NOT cutting the military budget accomplishes NOTHING. And Paul Ryan's is having orgasms over the fact he spared his wealthy friends and family from higher taxes – this bill does NOTHING to ELIMINATE the HUGE TAX BREAKS the wealthy got under Bush 12 years ago and NOTHING to make corporations pay their fair shar of taxes. Making the wealthy pay their fair share is NOT "raising taxes" as the Tea Party Republicans always like to portray it, it is simply taking AWAY their sweet tax breaks under Bush. So of COURSE Paul Ryan is orgasmic with joy – he succeeded again in his NUMBER ONE PRIORITY: Making SURE no wealthy people pay a DIME more in taxes, while you and me pay more more more. Oh, wait Paul, "no new taxes"?? Really? Then what do you call those higher fees we ALL pay? Republicans are SO FULL OF IT yet almost 50% of Americans still don't get it? Wow. So Paul SAYS no higher taxes, yet YOU will pay more, and the rich won't. And some of you still don't get that yet? We ARE in trouble, aren't we?

    December 11, 2013 10:12 am at 10:12 am |
  2. William Gunter

    Can you say kick the can down the road again. One more step towards financial ruin!

    December 11, 2013 10:13 am at 10:13 am |
  3. JD

    DC Observer... When you comment, understand the subject-matter before posting. As a Federal worker I do have a 401K that "I" contribute to... It's called the Thrift Savings Plan (TSP). Next...as a federal worker, I have a 3 tier retirement plan that (by the way has been eroding since the Reagan years). It consists of a basic annuity, my TSP & Social Security – if it survives. The 'pension' you are referring to is the smallest piece of the retirement plan... Oh and by the way, thanks for appreciating my sacrifices toward public service as you enjoy the services of the Government in your daily life! A majority of Federal workers are hardworking, and get paid very little compared to the salary and long hours that are put in... If you want to complain about where to make budget cuts, start researching all the 'Entitlement programs' that are put in place. I do agree with you on one matter...we do need a new Congress.

    December 11, 2013 10:16 am at 10:16 am |
  4. Name jk. Sfl. GOP CRUZ lee&rubio 24billion dallar LOSS of your tax money conservatives,the garbage of America.

    Better then nothing from the GOP shut the goverment down and LOSE 24 billion GOP clowns....

    December 11, 2013 10:18 am at 10:18 am |
  5. Thomas

    DC Observer
    It was actually cut from $980K down to $487K

    December 11, 2013 10:20 am at 10:20 am |
  6. karek40

    Maybe I missed something in the death list. If there is a list of SSN's of the dead then it should be a simple matter to compare that list with the checks being sent out and stop the fraud altogether. DUH

    December 11, 2013 10:22 am at 10:22 am |
  7. roger

    This was done for the sole purpose of trying to raise their approval rating. It has no teeth when it comes to spending and I didn't see anything in there that addressed the farm bill. All you need to know is that if the government does something you can count on the fact they did it with them in mind, not us.

    December 11, 2013 10:25 am at 10:25 am |
  8. Amanda

    There will never be a budget worth discussing if it is created by the same people who all have a hand in the pie!

    December 11, 2013 10:28 am at 10:28 am |
  9. Pam

    What about the cuts in food stamps, etc??? Hopefully, those in need will once again be able to buy food.

    December 11, 2013 10:30 am at 10:30 am |
  10. toveri

    so the far right and far left can complain
    John and Harry can put this up for a vote
    and then the President can sign off

    why not move this deal to August so we don't have this mess at Christmas each year

    December 11, 2013 10:30 am at 10:30 am |
  11. G2

    Save money now- cut later (in 2023). Kick the can down the road. Both parties agreed to do it- both deserves ample blame- both Donkies and Elephants are now running the circus- both with approval of the Leading Donkey in Charge. Meaning the active duty troops are facing a variety of proposed cuts like commissary closures and reduction in retirement pay (COLA) before they even retire while defending our country's seas and shores. Sad, very sad that the active-duty military is already taking it in the shorts while avoiding rounds/IEDs downrange.

    December 11, 2013 10:39 am at 10:39 am |
  12. Joe Smith

    At best, it's a start, but, as DC Observer said, we need a new Congress, one that is composed of people (I don't care what party they're in) who will work TOGETHER for the good of the country, and for the people, not for their campaign contributors. For that, we need a new Supreme Court, one that will put an end to insane spending that corporations and their lobbyists, PAC's, and the extremely wealthy now devote to electing professional politicians who expend their efforts on passing laws that benefit only those few who can afford their services, at the expense of the rest of us.

    December 11, 2013 10:40 am at 10:40 am |
  13. johnk

    Come on this is not any manor a savings plan. It never addresses financial foreign aid. It never address bloated salaries to Congress and other federal employees. It never address the costs to illegals, & give away programs to them. Cutting contractors salary by a $1,000 is a joke as compared to 487,000. It never addressed pension funds, medicare inflated charges by doctors which is now out of control. This deal is a joke and a sham. Congress you should be sent home immediately. The fact is Congress has no idea as to the cash flow of our govt today. If you don't know the numbers you can never manage the budget, this is a FACT! What you have here the American public, is a bunch of incompetent clowns who are not qualified to do much of anything.

    December 11, 2013 10:44 am at 10:44 am |
  14. poppao

    Interesting, Obama leaves the country to go to Africa and Congress reaches an agreement on something! Does that tell us something??

    December 11, 2013 10:47 am at 10:47 am |
  15. DeDude

    "The deal would take away automatic payment for non-profit student loan servicers"

    Does this mean that if an organization (Credit Union) provides a service for students without making a profit on it, we will punish them by lowering their payment? In other words in order to protect fat cat profiteers we will institute punishment for those who dare helping students without exploiting them?

    December 11, 2013 11:13 am at 11:13 am |
  16. Rudy NYC

    poppao

    Interesting, Obama leaves the country to go to Africa and Congress reaches an agreement on something! Does that tell us something??
    -----------------------------------
    Nope. Some of these conspiracy theories coming out of the right sound like they come from some pretty deranged minds.

    December 11, 2013 11:20 am at 11:20 am |
  17. Skarphace

    This bill has not yet passed the House and the Senate. And there is no guarantee it will.

    In fact, since Obama has said he approves of the bill, it is pretty much dead in the water in the House. Why can't Obama learn some strategy? If he wants a bill to pass both the House and the Senate, he needs to say that he will veto the bill. This would get it past the House. He then needs to say that on second thought he would approve of the bill. This would get it past the Senate.

    But no, he has to say he approves of this bill outright which means that not a single Republican in the House will end up voting for it after the Tea Party freaks scream at Boehner to change his mind about the bill.

    December 11, 2013 11:24 am at 11:24 am |
  18. Skarphace

    ByeByeToTheRight: "this bill does NOTHING to ELIMINATE the HUGE TAX BREAKS the wealthy got under Bush 12 years ago"

    Well, I am not a Republican (am in fact of no party), but I have to point out that you are wrong to a certain extent. The Bush tax breaks for those making in excess of $400k already expired at the end of last year.

    December 11, 2013 11:29 am at 11:29 am |
  19. Skarphace

    William Gunter: "Can you say kick the can down the road again. One more step towards financial ruin!"

    Our GDP is rising and the deficit is decreasing. Keep on this path and we will be fine.

    December 11, 2013 11:32 am at 11:32 am |
  20. cheryl

    Agreed the rich are getting a good deal and some of those that don't apply themselves. Funny how a few not all that tell me some of the jobs not good enough. Agree too but they were for me as I had to put food on the table. I took care of my late dear mom with no help at all. Food stamps should be used right not wrong but agree the people that do need them especially kids and the truly needy should get help. I went hungry as a child so know how it is.

    December 11, 2013 11:38 am at 11:38 am |
  21. FrmrMrine

    Obama caved again!

    December 11, 2013 11:39 am at 11:39 am |
  22. 03113/7India

    Instead of complaining about congress, maybe you should focus on ALEC and how it impacts your life and keeps the rich, well rich.

    December 11, 2013 11:44 am at 11:44 am |
  23. pvs53

    Congress is the biggest threat to this country. They keep kicking the financial can down the road and one day, near future, the can will fall into a big sinkhole in the middle of the road. The looming financial collapse will cripple the lives of most Americans. This country will never be the same after the collapse and Congress does not seem to care about the welfare of the average hard working American. The United States is firmly divided into Blue and Red states with little resolve. The day is coming when financial support from the Federal government will diminish greatly or end and the divided states will prepare to leave the Union individually or in like-minded areas.....maybe that is the plan and we are just kept in the dark.

    December 11, 2013 11:44 am at 11:44 am |
  24. History Bear

    1. Outlaw PAC's. Corporations and Unions are NOT HUMAN and NOT INDIVIDUALS- what a piece of sophistry.
    2. Cap congress at 12 years for both houses and make them pay a greater share of their pensions and insurances, just like the people they are supposed to serve.
    3. Set the country at a flat tax of 10%for Everyone and 12% for corporations, reduce all those deductions for everyone.
    4. Eliminate tax breaks for all overseas investments and payments. If It is an American corporation, then it's all taxable.
    None of this will happen. We are an oligarchy and the wealthy will continue to protect themselves. After all we have the best government money can buy.

    December 11, 2013 11:47 am at 11:47 am |
  25. unknown11

    It is a bad deal, and it will pass. The last thing that republicans want to do is give Obama and company a break. Keep the focus on democrats incompetence and dishonesty.

    December 11, 2013 11:58 am at 11:58 am |
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