WASHINGTON – The House is expected to vote today on a two-year budget deal that would restore billions in funding to domestic and defense programs while ending the uncertainty over whether another government shutdown might be right around the corner.
But the deal comes at a price to the long-term unemployed, to airline passengers, to student loan collection agencies and to some federal retirees, who will pay for the changes that the bipartisan budget deal makes in the previously enacted across-the-board spending cuts known as sequestration.
Local lawmakers voiced cautious support for the proposal, saying that it ends the “Perils of Pauline” budget showdowns that for three years have shaken consumer confidence and damaged the economy.
But they did so without knowing exactly how the deal will affect Western New York. The deal calls on the appropriations committees to draw up line-by-line spending plans for federal programs next year, meaning there’s no way to know whether the deal will bring more funding to the Buffalo Niagara region.
What is known, local lawmakers said, is that this is an imperfect deal that’s far better than the alternative of repeated budget crises and another possible government shutdown, which looms Jan. 15 unless Congress acts.
“Obviously this is a suboptimal outcome, but it does represent weak forward progress,” said Rep. Brian Higgins, D-Buffalo.
Rep. Chris Collins, R-Clarence, agreed, saying he is leaning toward supporting the budget deal. “This deal isn’t perfect for anyone. But you don’t let the perfect be the enemy of the good,” Collins said.
Higgins said he is hoping the bill will be particularly good for National Institutes of Health funding – which is hugely important to Roswell Park Cancer Institute and other medical facilities – as well as Head Start and other domestic programs hit hard by sequestration.
The budget deal means that those domestic programs would receive $22.4 billion more than they otherwise would have for fiscal 2014, which began Oct. 1, and $9 billion more for the following fiscal year.
While it’s too early to know which programs will benefit the most from those increases, Sen. Charles E. Schumer, D-N.Y., said some of the extra money is sure to come back Western New York. “In the budget agreement, there are winners and losers,” he said. “But the fact that Democrats and Republicans could come together and avoid another government shutdown, and at the same time restore funding for programs that are vital to Western New York – like education, highway building, medical research and border protection – is heartening.”
The deal is heartening, too, to the Pentagon, which would get identical boosts of $22.4 billion in fiscal 2014 and $9 billion more the next year. Pentagon leaders had said sequestration cuts had threatened military readiness, but at least now they stand likely to get back some of the funding.
“I support the legislative proposal, as I understand, which provides relief to the immediate and urgent readiness problems we face,” Army Gen. Martin E. Dempsey, chairman of the Joint Chiefs of Staff, said in response to questions from the Associated Press. “I hope this is the beginning of a conversation on the longer-term challenge to the capability and capacity of our force that is developing over time because of sequestration.”
Overall, the deal’s biggest winner could be the economy. Consumer confidence has taken a dive every time Congress has teetered near the brink of a shutdown or a government default, but all that should change if Congress approves the two-year budget deal before Christmas, which is what lawmakers from both parties expect.
The deal “might restore some faith in the ability of the United States Congress to actually get good things done on behalf of the American people,” said Josh Earnest, principal deputy White House press secretary. “It will also provide some certainty to the private sector. This is something that Republicans have said is really important for our economy; the president agrees.”
Then again, some Republicans expressed disappointment because the deal would increase federal spending above the levels set under sequestration.
“I think to walk away from the already agreed-upon reductions in spending that were so difficult to achieve, I think opens the floodgates that really threaten to put us right back in these spending habits,” said Sen. Marco Rubio, R-Fla., a potential presidential candidate in 2016. “And really, we’re going to continue to have a government that spends more money than it takes in.”
But House Speaker John A. Boehner, R-Ohio, dismissed such concerns, noting that the deal would lock in spending at levels below those that House Budget Committee Chairman Paul D. Ryan, R-Wis., had suggested. “If you’re for more deficit reduction, you’re for this agreement,” Boehner said.
The deal also drew criticism for things it doesn’t do, such as extending unemployment benefits for the long-term unemployed, which are set to run out Dec. 28. About 1.3 million people, including 6,240 in Erie and Niagara counties, are set to lose those benefits
Higgins said the absence of a benefit extension could limit the economic gains the budget will produce, since people who lose their unemployment checks will have less money to spend. And House Minority Leader Nancy Pelosi, D-Calif., said that some Democrats are likely to oppose the deal because of the lack of an extension of unemployment benefits. “I don’t know where that will come down because, as you know, our budget that (we) were putting forth was quite different. It was about growth,” she said.
Extending unemployment benefits would have cost $25 billion more. Negotiators decided that the money wasn’t there, given that they had to seek further revenues from unusual sources to make the plan work. For example, they boosted the fees that air passengers are charged for security. Those fees now stand at $2.50 per boarding, with a $5 maximum on any one-way trip. But under the deal, the fee would be a flat $5.60 for each one-way trip, starting July 1, 2014.
Budget negotiators set new limits on pensions for more recent federal retirees, and in several cases, they cut the rate at which the government reimburses entities for the services they provide. Local lawmakers warned that one of those cuts could have a severe impact at Pioneer Credit Recovery, a company that collects delinquent student loans and that employs 430 people in Wyoming County.
The deal cuts the reimbursement rate for student loan debt collection in half, and Collins said that could prove to be a huge hit to companies like Pioneer and their employees.
While also pressing for changes on the student loan issue – which could also result in job cuts at a Pioneer facility in Horseheads, in his district – Rep. Tom Reed, R-Corning, said he is leaning toward supporting the deal. “It changes the status quo in Washington by making permanent reforms to mandatory spending and continues us down the path of deficit reduction, which I am firmly committed to,” Reed said.
Still, the deal falls far short of what Reed and some other lawmakers from both sides had been seeking. Reed and a handful of allies have been pushing what he calls “the Honest Proposal”: a comprehensive, long-term budget deal that reforms the tax code and contains the projected growth in Medicare and Social Security, which are seen as the main drivers of the federal deficit in the years ahead.
“There is no reason why the Honest Proposal and the budget agreement cannot co-exist,” Reed said. “I spoke on the House floor today on the proposal, and our bipartisan group is meeting again today to move forward with the framework.”
News wire services contributed to this report. email: email@example.com