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

    We still have tons of waste, fraud and abuse and this is the best they can come up with? What a joke.

    December 11, 2013 07:53 am at 7:53 am |
  2. DC Observer

    This is all pickles and pickles and should not be called a serious budget - it is more kicking the can down the road and not worth implementing.

    Cutting a single contractor's salary to $1,000 to $487,000 is a JOKE. Implement fair bids an all and this number could be cut $50,000 to $100,000

    Do not reduce pensions for new government workers, eliminate them and put all new government hires onto a 401K plan that is funded as yo9u go so that when folks retire the government does not have to pay lifetime benefits like so many states are going and going bankrupt in the process.

    There are NO hard cuts here - NONE and this is shameful. Time for term limits.

    When some of our most profitable US corporations pay $0 in taxes, there is a flaw.
    When there is so much fraud in food stamps, disability, and unemployment, there is a flaw
    When we outspend the entire rest of the world on military, there is a flaw
    When Congressional office budgets are not cut there is a flaw

    If this is the best that Dems and Republicans can do, we need a new Congress

    December 11, 2013 07:57 am at 7:57 am |
  3. As-if

    Well it is a deal, so kudos for that. But seriously 1 TRILLION DOLLARS??? Atrocious still, and really these are all "realized" savings projected over the next 10 years, and who know what will happen even next year. They can always vote to change it. I would like to be hopeful, but this is really weak.

    December 11, 2013 09:29 am at 9:29 am |
  4. Namelester pace

    In plain english
    Nothing changes
    Called shell game
    The big smoze
    Have i got a deal for you
    Wool makes my eyes itch
    The checks in the mail
    All new brand new car
    I can drive home if i have to crawl to it
    Who does saint peter think he is
    If you belief its too good to be true

    December 11, 2013 09:29 am at 9:29 am |
  5. Norma Vessels

    At least it's a start, and not sliding backwards, as has been happening for the last 5 years. Let's at least appreciate what little we got. Any cut to the Sequester is good. Not great, but good. It's like you handing me a quarter instead of the 50 cents I asked for. I'll take it, save it and ask for another 50 cents later. Two quarters make 50 cents.

    December 11, 2013 09:31 am at 9:31 am |
  6. Bob Leonard

    @ DC Observer

    "Cutting a single contractor's salary to $1,000 to $487,000 is a JOKE."

    Thats not what the article says. The article said: if you get paid $488,000 or more, you will get less in the future. That doesn't mean the cap was $488,000. A quick google search shows the cap was set to $723,029 in April of 2012.

    December 11, 2013 09:32 am at 9:32 am |
  7. Tony

    Budget deal in plain English: you work hard, we take your money, and we blow it on favored interests.

    December 11, 2013 09:34 am at 9:34 am |

    But the real bottom line is that the agreement makes congress look less like a dysfunctional organization than a confused mob. Watching congress deal with issues like this is a little like giving a hammer to a baby.
    and that's just me, hollering from the choir loft..

    December 11, 2013 09:40 am at 9:40 am |
  9. GA observer

    How about reducing paycheck for all legislative, executive and judicial branches? why do they only look at the rest of the country and not at themselves?

    December 11, 2013 09:41 am at 9:41 am |
  10. Brosephus

    DC Observer
    "Do not reduce pensions for new government workers, eliminate them and put all new government hires onto a 401K plan that is funded as yo9u go so that when folks retire the government does not have to pay lifetime benefits like so many states are going and going bankrupt in the process."

    Federal government workers hired since 1987 are all on 401ks. The pension they're talking about is one-third of the entire retirement plan. Research FERS (Federal Employee Retirement System) for yourself. Our 401k equivalent, which is called the Thrift Savings Plan is the bulk of our retirement. If we don't invest, that pension ain't going to be enough to retire on.

    You can thank Ronald Reagan and his Congress for that. Funny that it's been in effect that long and most Americans are completely unaware of it.

    December 11, 2013 09:42 am at 9:42 am |
  11. Natrldiver

    Why does Congress need discretionary spending? They should have a strict budget like most businesses. If you do not have the funds, then you do not get to buy the fancy leather chairs. Get rid of earmarks, If a bill goes up at a set cost, that is what it should be, no riders to jack up the price.

    December 11, 2013 09:44 am at 9:44 am |
  12. Rudy NYC

    "It also ends a provision that allowed energy companies to stash funds in government accounts and earn interest above market rates."
    Wow. I have to wonder who set up that sweet deal. One would think that something like this should be criminal. Is this scheme limited to just energy companies?

    December 11, 2013 09:44 am at 9:44 am |
  13. T

    ........Why is it.........the GOP always goes after PEOPLE in middle and low income, and leave the corporate types without paying their share. Remember in 2010, EXXON net income was $13,000,000,000.00......and paid ZERO Federal taxes..............................

    December 11, 2013 09:45 am at 9:45 am |
  14. CosmicC

    Why are we paying contractors when Federal employees would make much less? We are paying huge sums of money to "military contractors" (AKA mercenaries). We have a huge standing army. Why do we need to hire from the private sector? It's both a shell game to keep our military head count artificially low, and a scheme to put tax dollars into the hands of these private sector contractors.
    The reason given for the privatization of government functions is that the private sector will do more for less. That's a patent lie. The only thing that's less efficient than the government is a large corporation.

    December 11, 2013 09:45 am at 9:45 am |

    Market funding of pension plans at the individual level is irresponsible. Too much depends on the state of the market at the time of retirement.

    December 11, 2013 09:46 am at 9:46 am |
  16. mkuske

    Tired of the Republicans saying they're the party of fiscal responsibility and then doing crappola like this, agreeing to roll back the one fiscally responsible accomplishment they've managed to advance in the last decade and a half - the sequester budget growth caps. As a nation we're in serious trouble when the spending frenzy proposed by the "fiscally responsible" party is only smaller than the spending frenzy of the "not fiscally responsible" party by a miniscule amount. BTW, the idea that you can "cut" mandatory spending is a farce. That's why it's called "mandatory".

    December 11, 2013 09:49 am at 9:49 am |
  17. John

    Not the best deal in the world but I do agree with Ryan that it is a step in the right direction and it is a bi-partisan deal that will hopefully lead to more give and take from both parties.

    December 11, 2013 09:53 am at 9:53 am |
  18. Peg

    This seems rather painless.

    Perhaps Congress has finally taken a "do no harm" stance, like medical professionals.

    The good thing is that it promotes "patient" (economic) wellness by reducing the impact of the sequester.

    If this passes, and the House Republicans refrain from behaving like super-villains from a James Bond movie and do not threaten to destroy the world gain when it is time to raise the debt ceiling, we should see a terrific 2014.

    December 11, 2013 09:53 am at 9:53 am |
  19. foxghostwriter

    Ryan increasing taxes on companies, cutting retired military pay and contractor pay?

    He'll be blacklisted by the close of business.

    December 11, 2013 09:58 am at 9:58 am |
  20. texasfan

    If it stops a government shutdown and debt crisis debate then I'm all for it. This madness has gone on lone enough.

    December 11, 2013 09:58 am at 9:58 am |
  21. Martha

    Well said. No cuts for the lawmakers. I say cut their budgets. They don't need assistants to assistants, pay for their own healthcare, pay for their own travel they should pay for everything that the taxpayers pay for. Term limits? Yes. Lobbyist? Get rid of them. Food stamps, disability (check each case) and welfare very flawed. Dems and Repubs get off the pot and do what you promised to get votes.

    December 11, 2013 09:59 am at 9:59 am |
  22. Brian Smith

    Yeah, you should be angry about this. After careful consideration over 10 minutes, this is the deal for thew next two years everyone on the committee came up with. It is the absolute best they could do. It rolls back the sequester which nobody on the committee likes, as the war hawks have explained time and again that every penny for defense is needed, and then more on top of whatever they have. In fact, everyone in government needs their budgets expanded in order to continue basic day to day operations that the american public absolutely depends upon – nothing, repeate – nothing can afford to be cut without our country falling to third-world status. We require a 3 trillion/year budget, but for this year 1 trillion will just barely make ends meet. Sad isn't it?

    December 11, 2013 09:59 am at 9:59 am |
  23. Skeptimist

    Congress' main accomplishment has been lowering public expectations for their performance to the point that they can now claim progress for doing little more than sneaking out the back.

    December 11, 2013 10:00 am at 10:00 am |
  24. Steve

    These people in Congress need to start doing their jobs. People in Congress are good at spinning wheels but never really getting anything done. When was the last time that Congress passed a Federal Budget on time? All they are worry about is either going home for long vacations or planning on being re-elected. There definitely needs to be term limits put in for every person in Congress. I feel so bad for the all the children and grandchildren and what they are inheriting from this Congress. It is just horrible.

    December 11, 2013 10:01 am at 10:01 am |
  25. jpmichigan

    Term limits is the key!! Get rid of the habitual politician who is making 100X more than they are worth. They find it to easy to spend and collect tax payers money for a do nothing job, for 20 plus, plus years. CUTTING WASTE< DOUBLE DIPPING WOULD BE A START!!!!

    December 11, 2013 10:02 am at 10:02 am |
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