What’s in the budget deal? Crises averted, relaxed spending limits

No government shutdown. No government default. No big spike in Medicare premiums for 15 million Americans. Looser limits on spending. And plenty of random stuff — including a new “Freedom Foyer” in the Capitol.

There’s a lot to absorb in the 144-page budget deal with the White House that departing House Speaker John Boehner is trying to nudge through Congress on his way out the door. The bipartisan budget deal was reached by leadership late Monday.

“This bipartisan budget deal is an important step forward for the Tri-Cities and especially for the ongoing cleanup at Hanford,” Sen. Patty Murray, D-Wash., said in a statement. At the end of 2013, she worked with Chairman Paul Ryan, R-Wis., to pass a two-year budget deal that expired Oct. 1. The deal announced Tuesday would build on that for another two years.

If the deal passes, it effectively eliminates the possibility of a government shutdown, according to the Energy Communities Alliance, an organization of local governments near Hanford and other Department of Energy sites. A government shutdown could lead to furloughs at Hanford.

“This budget is the result of compromise from both sides, but at the end of the day, I’m so glad we can give the Hanford community the certainty it needs to keep moving this critical cleanup forward,” she said. Her staff said the budget deal also is good for DOE’s Pacific Northwest National Laboratory in Richland.

Some senators and House members said Tuesday they were concerned that the deal produces savings from one of the most popular programs in rural areas, federally subsidized crop insurance.

Rep. Dan Newhouse, R-Wash., is aware of the changes to crop insurance and is very concerned, his staff said Tuesday.

Congress got rid of other types of subsidies in a wide-ranging farm bill last year, including payments that went to farmers regardless of crop yield or crop price. In turn, they increased federal support for crop insurance.

The budget deal would create $3 billion in savings during 10 years by lowering the rate of return for companies that sell crop insurance to farmers. The federal government partially subsidizes those companies and insures some of their losses.

The cuts could make farmers more dependent on Congress to approve emergency spending for farmers when they suffer large-scale losses, said Pat Roberts, R-Kansas, chairman of the Senate Agriculture Committee.

Things to know about the Bipartisan Budget Act of 2015:

A big deal?

This is not the sweeping “grand bargain” to reduce long-term deficits that Boehner and President Obama once aspired to negotiate.

But it at least would avert an immediate budget crisis, take care of other problems with Medicare and Social Security that were on the horizon, and give the expected new speaker, Rep. Paul Ryan, some time to get established before facing chaos. Boehner styles it part of an effort to “clean out the barn” before he hands off to Ryan.

The deal sets spending levels for the next two years that ease up on tough automatic cuts spelled out under a so-called sequester. It offsets that increased spending with cuts and savings elsewhere. The much-maligned sequester’s not done for entirely, though; legislators are just skirting it for a couple years.

GOVERNMENT SHUTDOWN

By establishing spending levels for the next two years, the deal removes the possibility of a shutdown engineered by conservative legislators who were threatening to refuse to approve a new budget unless they got concessions.

DEFAULT

If Congress doesn’t raise the federal borrowing limit by Nov. 3, the government would run out of borrowing authority, risking a first-ever default. The deal suspends the current $18.1 trillion debt limit through March 2017, pushing off a debt showdown until after the 2016 elections.

What’s spent

The deal would boost spending for Pentagon and domestic agencies by $50 billion in 2016 and $30 billion in 2017, with the new money evenly divided between defense and non-defense programs. It also would add another $16 billion in war funding above the administration’s request for 2016, with comparable increases in 2017.

Taken together, Obama gets $66 billion of the $74 billion he asked for in additional spending for 2016, reversing sequestration curbs that would have frozen things at current levels.

What’s cut

There’s a long list of cuts and savings elsewhere in the budget to offset the spending increases, including:

▪  Pensions: Increases the premiums that single-employer pension plans pay for their federal guarantees. $5.1 billion.

▪  Spectrum: Requires the government to auction electromagnetic spectrum to communications companies. $4.4 billion.

▪  Tax enforcement. Makes it easier for the IRS to audit large partnerships, including hedge funds and other investment groups. $11.2 billion.

▪  Strategic Petroleum Preserve. Requires the sale of 58 million barrels of oil from the Strategic Petroleum Reserve. $6.5 billion.

Entitlements

The budget agreement would avoid an unprecedented increase in Medicare Part B premiums for about 15 million people.

As well, Social Security’s disability trust fund is projected to run out of money in late 2016. If that happened, it would trigger a 19 percent cut in benefits for 11 million disabled workers and their families.

The budget deal would add six years to the life of the disability fund by temporarily reallocating a small portion of payroll taxes from Social Security’s retirement fund.

The measure also includes changes to the disability program to fight fraud and to encourage disabled workers to return to work.

ABOUT THAT FOYER …

There’s a small parting gift for Boehner in the bill: It designates a small rotunda on the first floor of the Capitol as “Freedom Foyer.” Boehner started calling it that a year ago. The rotunda includes busts of freedom advocates Winston Churchill, Lajos Kossuth of Hungary and Vaclav Havel of the Czech Republic.

Conservatives complain

Some conservatives are grumbling that they had no say in assembling the deal, which takes away their leverage to extract steeper budget cuts and other concessions.

Even Ryan, the speaker-in-waiting, called the bill the result of a process that “stinks.”

This story was originally published October 27, 2015 at 6:35 PM with the headline "What’s in the budget deal? Crises averted, relaxed spending limits."