Photographer: Andrew Harrer/Bloomberg

Representative Paul Ryan, a Republican from Wisconsin, left, and Senator Patty Murray,


The U.S. House passed the first bipartisan federal budget in four years, which would ease $63 billion in automatic spending cuts and avert another government shutdown. The legislation now heads to the Senate.


The House voted 332-94 today for the $1.01 trillion compromise budget crafted by Senator Patty Murray and Representative Paul Ryan, the chairman of a special bipartisan panel. President Barack Obama said he’ll sign the final measure.


The agreement’s main accomplishments are to ease automatic spending cuts that neither party likes by $40 billion in 2014 and about $20 billion in 2015 and cushion the military from a $19 billion reduction starting next month. The accord doesn’t include changes to taxes or spending on entitlement programs such as Medicare and Social Security.


“It’s progress,” House Speaker John Boehner said in a floor speech before the vote. “It’s doing what the American people expect us to do,” which is to “stick to our principles but find common ground.”


The budget deal replaces about half of the automatic cuts to defense and non-defense discretionary spending in 2014 and 25 percent of the reductions in 2015, which means most of the automatic cuts enacted in 2011 still take effect. It includes $23 billion in deficit reduction.


“This agreement is better than the alternative, but it misses a huge opportunity to do what the American people expect us to do, and that is to put this country on a fiscally sustainable path,” said Representative Steny Hoyer of Maryland, the second-ranking House Democrat.


Doctors Spared


The accord also spared doctors for three months from cuts in the Medicare payment rates set to start in January. The measure doesn’t extend emergency benefits for 1.3 million unemployed workers, an omission that frustrated Democrats, who say they plan to continue the fight when Congress returns in January from a holiday break.


The deal won bipartisan support because it doesn’t touch entitlement programs Democrats have pledged to protect or the corporate tax breaks Republicans favor.


It also doesn’t raise the U.S. debt ceiling, setting up a potential fiscal showdown after borrowing authority lapses as soon as February.


Lawmakers and some economists said adopting a formal budget will provide some certainty to the U.S. economy after three years of spending feuds that led to a government shutdown, rattled investors and prompted a downgrade in the nation’s credit rating.


Beth Ann Bovino, chief U.S. economist for Standard & Poor’s Corp., said in a recent newsletter that adoption of a bipartisan budget will be a boon to the U.S. economy.


Uncertainty Reduced


“The budget would reduce a key risk, political uncertainty,” she wrote. “The private sector will probably be more confident when planning investment and spending for next year, which would directly boost growth.”


The deal is far from the $1 trillion to $4 trillion grand bargain on taxes and spending that previous budget negotiators sought. The plan would set U.S. spending at about $1.01 trillion for this fiscal year, higher than the $967 billion required in a 2011 budget plan.


Much of the deficit reduction will come in later years, according to an analysis by the nonpartisan Congressional Budget Office. The plan would lower the deficit by $3.1 billion in 2014 and $3.4 billion in 2015 and exceed $20 billion a year in 2022 and 2023, the CBO said.


Medicare Payments


A big portion of the savings is tied to extending the cuts in Medicare provider payments into 2022 and 2023, rather than letting them expire in 2021 as under current law.


The accord may help lawmakers repair their image after a 16-day government shutdown in October that caused congressional approval ratings to fall to the lowest level recorded by the Gallup Organization polling group.


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House approves budget deal, handing major victory to Boehner





The House on Thursday approved a two-year budget deal that turns off $63 billion in sequester spending cuts, handing a major victory to Speaker John Boehner (R-Ohio.).

Large majorities in both parties backed the bill in a 332-94 vote.

Only 62 Republicans defected despite harsh criticism of the deal by conservative groups that said it did too little to cut spending, compared to 169 Republicans who backed it. The Democratic vote was 163-32.

Heritage Action, the Club for Growth and other groups said they would negatively score votes in favor of the legislation, but those threats failed to create a stampede against the bill.

Instead, members rallied around Boehner, who had strongly pushed back at the criticism from the outside groups, who he charged had “lost all credibility.”

During the debate, he said the does everything conservatives want.

“If you’re for reducing the budget deficit, then you should be voting for this bill,” Boehner said. “If you’re for cutting the size of government, you should you be supporting this budget.

“If you’re for preventing tax increases, you should be voting for this budget. If you’re for entitlement reform, you ought to be voting for this budget. These are the things I came here to do, and this budget does them,” he said.

Boehner was aided by House Budget Committee Chairman Paul Ryan (R-Wis.), who negotiated the budget deal with Sen. Patty Murray (D-Wash.).

While the 2012 GOP vice presidential candidate also came under fire from the right, Ryan’s credentials with conservatives helped GOP leaders win votes.

While the deal did not represent the “grand bargain” of entitlement reforms and tax hikes Boehner and President Obama flirted with in 2011, Ryan argued it represented a victory for conservatives since it will reduce deficits by $23 billion over 10 years.

The bill cuts the deficit, avoids tax hikes, and makes permanent reforms to save money, such as stopping welfare checks to criminals, Ryan said.

He also said it reflected the reality of divided government in Washington, where Republicans hold only the House, and that it would prevent another government shutdown.

Near the end of the debate, Ryan noted that as the GOP’s vice presidential candidate in 2012, he was part of the GOP effort to return Republicans to the White House.

“We tried defeating this president,” he said. “I wish we would have.”

“Elections have consequences,” Ryan added. “And I fundamentally believe — this is my personal opinion, I know it’s a slightly partisan thing to say — to really do what we think needs to be done, we’re going to have to win some elections.

“And in the meantime, let’s try to make this divided government work.”

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