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. unemployed1

    Don't rush this so you can go on Christmas vacation. Some people won't have much of a Christmas if extensions on unemployment don't continue. Are the unemployed forgotten?

    December 11, 2013 12:03 pm at 12:03 pm |
  2. Vince

    A lot of people in congress don't like it...which means its probably a good deal.

    December 11, 2013 12:04 pm at 12:04 pm |
  3. oreo

    I smell bacon.

    December 11, 2013 12:14 pm at 12:14 pm |
  4. Gunderson

    Well Excuse me,
    The inmates have been running the asylum for the last 100 years. Now all those big plans have come home to roost. It is what the majority voted for, time after time. Now you road to easy street is filled with pot holes extremely hard to navigate. Now many of you are waiting for all your hard work to pay off. So were the Auto Workers. You know what happened to them. As you look you will see nothing has changed but the players. Believe it, Ralph Kramdon is still driving that City Bus in Brooklyn for 55 dollars a week. He was always looking for the Brass Ring. It doesn't exist. This Budget, if it is passed is a lot closer to the Nanny State than any Fiscal Responsibility. Get ready for a return to the 1930's.

    December 11, 2013 12:15 pm at 12:15 pm |
  5. The Rs Have It (and It Ain't Pretty)

    The "Odd Ball Proposals" are aptly named since all of them were proposed by a bunch of odd balls.

    December 11, 2013 12:26 pm at 12:26 pm |
  6. Brian

    Republicans don't want another shutdown. They have and will continue to have a lot of momentum with the debacle of Obamacare. Going into an election year the last thing they need is to start the year off wit another blame game over the shutdown. When the republicans take over the senate and keep control of the house, you'll see more budget cuts.

    December 11, 2013 12:41 pm at 12:41 pm |
  7. Gary in WA

    More spending now offset by future spending cuts? Yea, we have seen how well this has worked in the past. I just wish Congress would be honest and say they want to increase spending and not blow smoke about future spending cuts (that will not happen).

    December 11, 2013 12:50 pm at 12:50 pm |
  8. JW

    Sounds like the Republicans gave up....what happened to all those principles they stood by? One more reason to vote them all out – they don't stick to their promises.

    December 11, 2013 12:55 pm at 12:55 pm |
  9. A True Conservative

    @Vince – my thoughts exactly – when neither side is happy, it's probably a pretty good compromise......

    December 11, 2013 01:01 pm at 1:01 pm |
  10. Susan Bosworth

    Prisoners getting unemployment checks? Why is it my 10 year old has a computer that can get more information and is more powerful the governments?

    December 11, 2013 01:13 pm at 1:13 pm |
  11. DustyOnes

    Let's see. The Government is spending $3.67 Trillion so with the numbers in this article we are looking a $2.6 Trillion deficit.

    December 11, 2013 01:13 pm at 1:13 pm |
  12. kiddingme

    So cuts are pushed to back end, and I'm sure they'll be pushed to back end from now on. No one in Congress really wants to do the difficult task of balancing budget and making necessary cuts. Wish I could tax my employer in a hundred different ways to maintain an ever increasing budget! #kickingthecandowntheroad

    December 11, 2013 01:15 pm at 1:15 pm |
  13. bombastus

    It's up to the democrats to make this deal. The tea party won't. They are beyond hope but there is some hope that the progressive dems might bite the bullet and get on board. It would be a major coup if Boner could make a deal with the progressive dems to get this done. Might also save his reputation.

    December 11, 2013 01:19 pm at 1:19 pm |
  14. Jerry Okamura

    What is the bottom line? What will be the amount of deficit spending? Will total government spending go down or continue to increase? Either way, by how much?

    December 11, 2013 01:27 pm at 1:27 pm |
  15. Claudia, Houston, Tx

    What about that PORK BARREL SPENDING? Will savings if any go to that?

    December 11, 2013 01:33 pm at 1:33 pm |
  16. Joe

    Bad policy, the only way to narrow the gap between rich and poor is to tax the rich and feed the poor. A dollar given to a poor person grows the economy. A tax dollar given to a rich person stagnates the economy. This is a third world country budget and the US is becomming the worlds largest third world economy thanks to conservative policy.

    December 11, 2013 01:41 pm at 1:41 pm |
  17. buildcastles

    Looks like it leaves a lot of heavy lifting on SSI, Medicaid and medicare for the Feb debt ceiling. Ok...Bring it on!

    December 11, 2013 01:52 pm at 1:52 pm |
  18. drowlord

    Sounds like a pretty feeble budget plan. We'll spend more in the next two years, and "make up for that later," with a 10-year plan that will be postponed or ignored two years from now. Meanwhile, the hundreds of billions in deficit we incur annually will be cut marginally by a fraction of a percent of the federal budget. Nice work, guys. No, sorry, I wasn't being sincere.

    December 11, 2013 02:07 pm at 2:07 pm |
  19. Zaphod

    Can I get some bar-b-que sauce for this?

    December 11, 2013 02:12 pm at 2:12 pm |
  20. Me

    Quixote
    The country needs Democratic majorities in both houses of congress next year to get us moving forward again.
    ____________
    LMFAO, if that happened (which is NEVER WILL) the country would be in FULL BANKRUPTCY within 2 years! You are the problem with politics these days, we need BOTH parties WORKING TOGETHER to balance each other out, we need to stop this partisan crap and work together!! Grow up and starting thinking for yourself! I am happy they finally started working together, I hope this is the start of a long trend!

    December 11, 2013 02:33 pm at 2:33 pm |
  21. qwerty

    Convicted felons collecting govt cheques – the US of A really loves its criminals more than its law-abiding citizens!

    December 11, 2013 02:36 pm at 2:36 pm |
  22. Paul

    "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."

    Spend now since elections are coming up with the promise of cut father out which can be changed with the next budget. Typical scam. No talk of reducing the deficit.

    December 11, 2013 02:39 pm at 2:39 pm |
  23. Darrell

    @Joe: it has never been a good idea to STEAL from the rich with higher taxes just to GIVE to the poor. That only continues a system where people are dependent on others to take care of them. Why would someone be motivated to work if the Government is just going to give them everything for nothing? Nothing has changed to make your ridiculous argument any more valid then the failure the idea has been in the past.

    December 11, 2013 02:41 pm at 2:41 pm |
  24. Monomachos

    Joe
    Bad policy, the only way to narrow the gap between rich and poor is to tax the rich and feed the poor. A dollar given to a poor person grows the economy. A tax dollar given to a rich person stagnates the economy.
    ________________________________________________________________________________
    Your proposal has already been tried – Russia, North Korea, etc. - It failed. The gap will narrow when the government creates an atmosphere friendly to business and growth, creating good jobs (not the part-time no benefits jobs that have been created the past few years). We hired an amateur as president – twice – and those who voted for him complain about the effects of his policies without admitting from whence they came.

    December 11, 2013 02:57 pm at 2:57 pm |
  25. Bleeding Dry

    So basically they spit on a bon fire.

    December 11, 2013 02:59 pm at 2:59 pm |
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