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With budget deal, Maryland businesses breathe sigh of relief

Aberdeen, MD -- The C4ISR Complex at Aberdeen Proving Ground. Lloyd Fox, Baltimore Sun Staff.
Aberdeen, MD -- The C4ISR Complex at Aberdeen Proving Ground. Lloyd Fox, Baltimore Sun Staff.(Lloyd Fox / Baltimore Sun)

It wasn't until the wee hours of Friday morning that Congress finally passed a two-year deal that staves off harsh spending reductions and averts a credit default, setting aside most of the big fights over the federal budget for the remainder of President Barack Obama's term.

At $80 billion, the latest accord is modest by Washington budget standards.

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But in Maryland, where federal spending powers a large portion of the economy, many businesses said they were just grateful a deal — any deal — had been reached.

"To know that there's a budget deal and that we have that behind us … is for a lot of us a feeling of relief," said Jill McClune, president of the Army Alliance, a nonprofit that advocates for Aberdeen Proving Ground and counts many contractors among its members.

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In a political era more known for conflict than compromise, the two-year budget deal that retiring Speaker John A. Boehner reached with President Barack Obama came as something of a surprise.

The package lifts caps on the appropriated spending passed by Congress by $50 billion in 2016 and $30 billion in 2017, evenly divided between defense and domestic spending. Another $16 billion or so would come each year in the form of inflated war spending, evenly split between the Defense and State departments.

The agreement also raises the government debt limit through March 2017, removing the threat of an unprecedented national default on Nov. 3.

Senators voted 64-35 for the measure, with Democrats joining Republican defense hawks to overcome opposition from debt-focused conservatives, including two GOP senators running for president — Rand Paul of Kentucky and Ted Cruz of Texas, who filibustered, delaying the vote until 3 a.m.

The White House said Obama would sign the bill Monday.

Economist Daraius Irani of Towson University's Regional Economic Studies Institute said he was surprised that Congress acted as swiftly as it did, given rhetoric earlier in the week. Averting a government shutdown spares Maryland a major economic disruption and provides certainty, he said.

"It won't be a huge windfall, but I think more importantly it will help stabilize that portion of our economy, so people won't be as anxious anymore," he said.

Budget talks had been underway since mid-September, with Obama saying repeatedly he would not negotiate budget concessions in exchange for increasing the debt limit, though he did agree to package the debt and budget provisions.

Republicans, who control both chambers of Congress, voted en masse against raising the debt limit last week — and many maintained their opposition to a deal.

"Republican majorities have just given President Obama a diamond-encrusted, glow-in-the-dark AmEx card," Cruz said.

Some Maryland contractors said they share those concerns.

David Costello, president of Columbia-based Costello Construction, said public contracts represent about 75 percent of the roughly 45-person firm's construction work.

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"I'm sure you were expecting to hear me say, 'Yeah, let the money flow! Give me more contracts.' But I'm also a patriot. I want to see the country do well in the long term, not just David Costello do well in the short term," he said. "I think that level of debt is suffocating for our economy, so I think it's going to adversely effect all businesses eventually."

The two-year agreement would avert a looming shortfall in the Social Security disability trust fund that threatened to slash benefits, and head off an unprecedented increase in Medicare premiums for outpatient care for about 15 million beneficiaries.

Cuts include curbs on Medicare payments for outpatient services provided by certain hospitals and an extension of a 2-percentage-point cut in Medicare payments to doctors through the end of a 10-year budget. There's also a drawdown from the Strategic Petroleum Reserve, and savings reaped from a Justice Department fund for crime victims that involves assets seized from criminals.

The appropriations committees face a Dec. 11 deadline to craft legislation reflecting the spending priorities set forth in the compromise budget bill.

McClune said she is optimistic about the funding increases, but wants to see more about how the money is spent.

Attorney Steve Tiller, president of the Fort Meade Alliance, which counts more than 250 firms as members, said just knowing that a budget plan is in place is a good step for them.

"A lot of our members have been deeply affected by sequestration and at least knowing that there will be funding for a predictable amount of time is, I'm sure, making them feel good," he said.

The Associated Press contributed to this article.

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