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Bipartisan congressional negotiators agree on U.S. budget deal

AP

In a rare show of bipartisanship, Congressional negotiators reached a modest U.S. budget agreement on Tuesday to restore about $63 billion in automatic spending cuts to programs ranging from parks to the Defense Department, with votes expected in both houses by week’s end.

The spending increases would be offset by a variety of increased fees and other provisions elsewhere in the budget totaling about $85 billion over a decade, leaving enough for a largely symbolic cut of about $23 billion to a national debt which now stands at $17 trillion and growing.

The White House quickly issued a statement from President Barack Obama praising the deal as a “good first step.” He urged lawmakers in both parties to follow up and “actually pass a budget based on this agreement so I can sign it into law and our economy can continue growing and creating jobs without more Washington headwinds.”

The U.S. federal budget year began on Oct. 1. But Congress, ensnared by political disagreements, could not agree to a budget plan at the time and the government was shut down. The country also came close to its first ever federal default when Congress failed to reach an agreement on raising the debt ceiling. Republicans eventually relented, agreeing to a short-term deal to fund the federal government and raise the debt ceiling when it became clear that Americans were deeply angered by their tactics.

Announcement of the new deal came in the form of a statement from the two negotiators, Sen. Patty Murray, a Democrat, and Rep. Paul Ryan, a Republican. Murray and Ryan currently chair the budget committees in the Democratic-controlled Senate and the Republican-led House of Representatives, and negotiated the deal in secretive talks over recent weeks.

The deal “reduces the deficit by $23 billion and it does not raise taxes. It cuts spending in a smarter way” than the ones in effect, Ryan said. Murray said the agreement “breaks through the recent dysfunction to prevent another government shutdown and roll back sequestration’s cuts to defense and domestic investments in a balanced way.”

Murray said he hoped the agreement can “rebuild some trust and serve as a foundation for continued bipartisan work.”

Murray and Ryan had scarcely finished lauding their work when Republican Sen. Marco Rubio, a potential 2016 presidential contender, announced he would oppose it.

“We need a government with less debt and an economy with more good paying jobs, and this budget fails to accomplish both goals,” he said in a statement.

While Tuesday’s agreement will have little impact on deficits, it has the potential to allow both Republicans and Democrats to avoid further politically charged budget clashes for over the coming years. It was also reached without the threat of an impending, catastrophic deadline hanging over lawmakers’ heads.

But the plan does nothing to address three of the big drivers of American deficit spending — the Medicare government health insurance program for the elderly, the Medicaid aid program for the poor and the Social Security government pension system.

Conservatives are upset that the plan rolls back automatic spending cuts, known as the sequester, while liberals are angered by the requirement for federal employees to pay more toward their pension accounts. Significantly for Democrats, they failed in their bid to include an extension of benefits for workers unemployed longer than 26 weeks. The program expires on Dec. 28, when payments will be cut off for an estimated 1.3 million individuals.

Officials said that under the agreement, an estimated $63 billion in automatic spending cuts would be restored through the end of the next budget year, which runs to Sept. 30, 2015.

The offsetting of $85 billion in deficit cuts would play out over a decade. It calls for newly hired federal workers to make larger contributions to their own pensions, as well as an increase in a federal airport security fee that adds $5 to the cost of a typical round-trip flight. The annual increase in military retirement benefits for those under age 62 would also be slowed.

More savings would come from extending an existing 2 percent cut in payments to providers who treat Medicare patients.

Full details were unavailable pending their posting on budget committee websites.

Conservative organizations attacked the proposal as a betrayal of a hard-won 2011 agreement that reduced government spending. The agreement is counted among the main accomplishments of tea-party-aligned Republicans who came to power earlier the same year pledging to slash government spending and avoid raising taxes.

Americans for Prosperity issued a midmorning statement saying that Republican lawmakers should uphold current spending levels. Otherwise, the group said, “congressional Republicans are joining liberal Democrats in breaking their word to the American people to finally begin reining in government overspending that has left us over $17 trillion in debt.”

Given internal Republican divisions in the House, its leader, Speaker John Boehner, is likely to need Democratic votes to approve any deal by Ryan and Murray. It was not immediately clear how many Democratic lawmakers would support a plan that lacked an extension of long-term unemployment benefits.

“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,” Boehner said, indicating he would support bringing the deal to a vote on the House floor.

If left in place, the automatic reductions would carve $91 billion from the day-to-day budgets of the Pentagon and domestic agencies when compared with spending limits set by the hard-fought 2011 budget agreement.

Support for a deal to ease the reductions is strongest in Congress among defense hawks in both houses and representatives of both parties who fear the impact on military readiness from a looming $20 billion cut in Pentagon spending.

While the White House wants a deal for a same reason, it also wishes to ease the impact of automatic cuts on domestic programs from education to transportation to national parks.