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Budget deal would avert shutdown, cut federal workforce

ElectionsU.S. Government Shutdown (2013)RetirementBudget Control Act of 2011Budgets and Budgeting

Congressional negotiators announced a $1.01 trillion budget agreement on Tuesday that would avoid another government shutdown but deliver an additional round of cuts to federal employees in Maryland.

The two-year deal would replace $63 billion in across-the-board spending cuts known as sequestration with more targeted budget changes, including higher retirement contributions for newly hired federal workers and an increase in airline ticket fees.

In a rare moment of bipartisanship, President Barack Obama and House Republican leaders expressed support for the plan, noting that it would end a cycle of budget brinkmanship that has gripped Washington for three years and that led to a 16-day government shutdown in early October.

"This agreement doesn't include everything I'd like — and I know many Republicans feel the same way," Obama said in a statement. "That's the nature of compromise."

But senior lawmakers who brokered the hard-fought deal might face an even bigger challenge in selling it to conservative Republicans. Many are wary of trading the guaranteed, $109 billion in cuts included in sequestration with out-year reductions called for in the deal.

And some Democrats, while generally positive about the agreement, said they are concerned about $12 billion in cuts proposed for military and civilian federal employees. Maryland is home to some 300,000 federal employees, about 10 percent of the state's workforce.

"They negotiated a fair agreement," Sen. Ben Cardin, a Maryland Democrat, said in an interview, "although I'm disappointed that there's anything in there concerning the federal workforce."

Cardin said he isn't sure how he will vote.

House leaders hope to bring the deal to a vote by Friday, the day the chamber is to adjourn for Christmas. If the vote fails, Congress would have until Jan. 15 to pass a stopgap budget and avoid another government shutdown.

If the House passes the measure, it would go to the Senate next week.

Lawmakers from both parties are eager to avoid the arbitrary sequester cuts that began last spring, but some tea party conservatives prefer those reductions as a way to keep federal budget deficits in check.

Republican Sen. Marco Rubio of Florida, considered a possible presidential candidate in 2016, said he opposes the deal.

"This budget continues Washington's irresponsible budgeting decisions by spending more money than the government takes in," he said, adding that the American people "deserve better."

The agreement sets 2014 spending at $1.012 trillion, higher than the $967 billion under the sequester, but less than Democrats had wanted. There are no new taxes, as Republicans insisted. The new spending is paid for with new fees and cuts elsewhere in the federal budget.

New federal workers hired after Dec. 31 would pay 1.3 percentage points more toward their retirement — or 4.4 percent of their salary. The change is similar to one Congress made early last year that increased retirement contributions for new federal hires to offset the cost of extending a payroll tax break.

The proposal would also reduce cost-of-living adjustments for working-age military retirees, tying those increases to the rate of inflation minus 1 percent.

Federal employees have been working under a pay freeze since 2010 and while they received retroactive pay after the shutdown, they were not made whole for furloughs caused by sequestration.

Many Democrats defended the plan — and the federal workforce cuts — arguing that without a deal, federal workers would likely face another round of sequestration that could lead to more furloughs. Some Republicans initially sought a higher federal retirement contribution, in the neighborhood of 5.5 percent.

Rep. Chris Van Hollen, one of 29 lawmakers who negotiated the deal, called it "a good step forward" in a statement that did not mention the federal workforce.

"This agreement isn't perfect, but it is certainly better than no agreement at all," the Montgomery County Democrat said.

Another Democrat, Rep. Gerry Connolly, whose Northern Virginia district includes many federal employees, said the cuts to retirement benefits would be a "hold your nose and vote yes" compromise.

But others were more critical of the cuts, including Rep. Raul Grijalva, an Arizona Democrat and co-chairman of the progressive caucus.

"Federal employees work every day to inspect our food, deliver Social Security checks and ensure our loved ones arrive safely at airports around the country," he said. "I strongly oppose a budget deal that asks federal employees to endure another pay cut."

The accord did little to placate leading conservative groups, who attacked the deal even before its details were announced.

"There's a real concern about giving up the sequester," said Sen. Orrin G. Hatch, a Utah Republican, who said he would be disinclined to back such a deal. "Republicans know that the one major victory they had was the sequester."

House Speaker John A. Boehner has faced a similar challenge in the past, when conservatives in his party rejected previous budget deals. If he can't count on a majority of Republicans, he would be forced to rely on Democrats for passage — something he has been reluctant to do because it dilutes his power.

Already, 30 House Republicans have signed a letter in support of keeping the sequester cuts, and GOP aides expect as many as 100 Democratic votes would be needed to secure passage because of likely GOP defections.

But as details of the deal emerged, it was unclear whether Boehner could pick up enough Democratic support.

Jim Dean, chairman of Democracy for America, said Democrats should reject the deal because it fails to include an unemployment insurance extension. "Negotiators have declared war on Christmas and potentially sentenced millions of struggling Americans to a very bleak New Year," he said.

In the Senate, even though Democrats have the majority, Senate Majority Leader Harry Reid would need a handful of Republican votes to overcome an expected tea party-led filibuster.

Pressure on Republican senators to oppose the deal was coming not only from conservative groups but from conservative candidates challenging incumbents in 2014 primary races.

Sen. Mitch McConnell, the Republican minority leader who is facing a primary attack in Kentucky, said Tuesday that the sequester law has been a "success, and I hope we don't revisit it."

john.fritze@baltsun.com

Lisa.Mascaro@latimes.com

twitter.com/jfritze

Copyright © 2014, The Baltimore Sun
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ElectionsU.S. Government Shutdown (2013)RetirementBudget Control Act of 2011Budgets and Budgeting
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