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Budget Deal Would Up Spending, Avert Another Government Shutdown

Just in time for the holidays, Republicans and Democrats have reached a bipartisan budget deal that would avoid tax increases, shrink the sequester by $63 billion over the next two years and modestly lower the long-term deficit.

House Budget Chairman Paul D. Ryan, R-Wis., and Senate Budget Chairwoman Patty Murray, D-Wash., announced the deal late Tuesday and now have the task of convincing their colleagues to back it.

“We’ve been talking all year and this week that hard work … has paid off,” Ryan said.

“We have broken through the partisanship and gridlock to reach a bipartisan budget compromise that will prevent a government shutdown in January,” Murray said.

But before the deal was announced there were already signs among Republicans and some Democrats that it was not going to be acceptable.

The plan would set a $1.012 trillion discretionary spending level for 2013 — halfway between the $967 billion sequester level and the far-higher number Democrats were seeking. It also set a $1.014 trillion level for 2014.

The additional spending now would come at the expense of more spending later — notably in pension benefits for federal workers and other items that Ryan and Murray have yet to detail. The long-term deficit would be cut by $23 billion.

The bill itself is expected to be posted Tuesday night.

President Barack Obama and congressional leaders in both parties signed on to the deal Tuesday evening.

“Today’s bipartisan budget agreement is a good first step,” Obama said in a statement.

“It’s balanced, and includes targeted fee increases and spending cuts designed in a way that doesn’t hurt our economy or break the ironclad promises we’ve made to our seniors,” he said. “It does all this while slightly reducing our deficits over time — coming on top of four years of the fastest deficit reduction since the end of World War II.”

Obama said Congress should also extend unemployment insurance — left out of the deal — and take other steps to boost the economy.

Speaker John A. Boehner, R-Ohio, also praised the deal.

“While modest in scale, this agreement represents a positive step forward by replacing one-time spending cuts with permanent reforms to mandatory spending programs that will produce real, lasting savings,” he said in a statement.

Ryan defended the pension cuts for federal workers. “We think it’s only right that they pay something more towards their pensions, just like the hardworking taxpayer who pays for those pensions in the first place,” he said.

Murray pointed out that if the deal hadn’t been reached, the sequester would have stayed intact and the same federal workers would have faced furloughs and uncertainty.

“As a conservative, I think this is a step in the right direction,” Ryan said.

“What am I getting out of this? I’m getting more deficit reduction … there are no tax increases here. … We’re finally starting to deal with autopilot spending.”

Noting the lack of tax increases, he said, “No one had to sacrifice their core principles.”

Murray expressed disappointment that “we weren’t able to close a single corporate tax loophole.” She also acknowledges that Republicans were hoping to use the budget deal to make changes to Medicare and Social Security. But she emphasized that this is an important next step.

“We need to acknowledge that our nation has serious long-term fiscal and economic challenges this bill doesn’t address and our process has been broken.”

This process “restores some trust,” she said.

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