A bipartisan committee of House and Senate negotiators reached an agreement Tuesday on a new budget. The agreement was not the "grand bargain" that many deficit hawks had hoped for, but, if passed, it would provide some stability through 2014 by preventing future "crises," like October's government shutdown.
The agreement was announced by the two chairs of the conference committee, Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), in a late Tuesday press conference.
"I'm proud of this agreement," Ryan said. "It reduces the deficit – without raising taxes. And it cuts spending in a smarter way. It's a firm step in the right direction, and I ask all my colleagues in the House to support it."
The deal, known as the Bipartisan Budget Act of 2013, sets discretionary spending at $1.012 trillion, about halfway between what the Republican-led House and the Republican-led Senate wanted. It offsets about $63 billion of the sequester, a set of automatic spending cuts put in place by the 2011 budget agreement, with cuts elsewhere. And, it reduces the deficit by about $20 to $23 billion.
The savings come from a number of modest measures, such as eliminating some government programs for energy companies, a slight reduction in certain benefits for some government workers and military retirees, and a $1.4 billion reduction in Medicaid by eliminating payments that could come from "dead-beat dads" or insurance companies.
The deal does not include an extension of unemployment benefits, which some Democrats tried to add to the agreement late in the process. Speaker of the House John Boehner said he would not rule out an unemployment benefit extension negotiated as a separate bill in January.
Murray emphasized that the agreement would prevent the "constant crisis" that has "cost us billions of dollars in lost growth and jobs."
Both Murray and Ryan emphasized the difficulties of reaching an agreement when the House and Senate are controlled by different parties. Ryan noted that 1986 was the last time a budget agreement was reached under divided government.
"I am very proud to stand here today with Chairman Ryan," Murray said, "to announce, we have broken through the partisanship and the gridlock, and reached a bipartisan budget compromise that will prevent a government shutdown in January."
The agreement does not tackle any of the long-term budget crises that are caused by the growth in spending in entitlement programs, especially Medicare and Social Security.
Though the agreement is modest, giving the public confidence that political leaders can work together is an important step with the deal, Murray explained.
"We have some differences on policies," she said, "but we agree that our country needs some certainty, and we need to show that we can work together, and I've been very proud to work with [Ryan]."
The bill must now go to the House and the Senate, and signed by President Barack Obama, for it to go into effect.