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

    This article feels incomplete...

    December 11, 2013 03:08 pm at 3:08 pm |
  2. pmmarion

    "The change means that new federal workers would see a 1.3% pay cut." How in the devil can you get a pay cut when you are not even working or being paid?

    December 11, 2013 03:13 pm at 3:13 pm |
  3. Me

    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....
    ______________
    I thought it was 30 billion, now it is 24 billion, oh wait tomorrow it will be 30 billion, today it is 24 billion, got it....talk about a clown, take a look in teh mirror!! LMFAO You do know this number is a made up number and can't even be proven, right??? Prove me wrong, lets see proof of this 24/30 billion number you keep throwing out.....yet that is what I thought, you CAN'T!

    December 11, 2013 03:34 pm at 3:34 pm |
  4. Fuzzy math

    The budget deal in simple English "No le quedará dinero".

    December 11, 2013 03:36 pm at 3:36 pm |
  5. Andy

    Does the author of their piece think it might have been important to note that this "deal" adds an additional 8 trillion dollars to the National debt taking it to over $25 trillion? Hey all you millennials–that's $339, 213 for each of you. WAKE UP.....

    December 11, 2013 03:36 pm at 3:36 pm |
  6. the mayor of Medinah

    so why was this story burried under all of the other junk?

    December 11, 2013 03:43 pm at 3:43 pm |
  7. The Mayor of Medinah

    sign me up...
    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.

    December 11, 2013 03:44 pm at 3:44 pm |
  8. nonyabidnes2

    So where's the "Plain English"?

    December 11, 2013 03:44 pm at 3:44 pm |
  9. John Lubeck

    From the sounds of this article, it appears that Congress got together and did something useful. Must be a catch.

    December 11, 2013 04:01 pm at 4:01 pm |
  10. PJ

    Reads like Ryan is trying to appear as a hero. We all know where his true values lie.......in the gutter.

    December 11, 2013 04:04 pm at 4:04 pm |
  11. john

    Slimmer cost of living to retirees? Slimmer, there isn't COLA now for retirees.

    December 11, 2013 04:35 pm at 4:35 pm |
  12. David Major

    1 Trillion a year is from defense and what we give to other countries. Why do we give other countries money when we are 18 Trillion in debt? The people in DC are stupid. Only stupid people get the country trillions in debt.

    Saudi Arabia on the other hand has trillions in cash, provides education and healthcare to its citizens. They could afford to give other countries money. They don't. Saudi Arabia isn't stupid enough to Free the World and get in debt.

    December 11, 2013 04:42 pm at 4:42 pm |
  13. carl

    If the liberals don't like it and the conservatives don't like it, it must be a good idea.

    December 11, 2013 04:58 pm at 4:58 pm |
  14. Fed Up

    This bill is pure B.S. designed to help the republicans not look bad in the 2014 senate elections and to give the democrats just about everything they want . Elimination of the sequester and increased spending with increased revenue in taxes concealed as fees.As Nancy Reagan use to put it "Just Say No."

    December 11, 2013 05:17 pm at 5:17 pm |
  15. shorething

    So how does this affect my student loans. I see a blurb about student loan servicers but will it affect me?

    December 11, 2013 05:52 pm at 5:52 pm |
  16. Torn

    Marginally better than nothing.

    December 11, 2013 06:31 pm at 6:31 pm |
  17. JJ

    What this article does NOT say is that the military cut is 1% PER YEAR. Thus for a 20 year career military person, who retires at age 40, it will reduce their lifetime pension by 22%!

    December 11, 2013 10:39 pm at 10:39 pm |
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