A US Budget deal

Reuters reports:

A bipartisan budget deal announced in the US Congress, while modest in its spending cuts, would end nearly three years of partisan stand-offs between Democrats and Republicans that culminated in October with a partial government shutdown.

Democratic Senator Patty Murray and Republican Representative Paul Ryan appeared before reporters Tuesday (local time) to announce the US$85 billion (NZ$102 billion) budget accord, which still must be approved by the full Senate and House of Representatives.

“For far too long compromise has been considered a dirty word,” Murray said, adding that the uncertainties created by three solid years of Washington bickering “was devastating to our economic recovery.”

Ryan, the Republican Party’s 2012 failed vice presidential candidate who has his eye on either a 2016 presidential campaign or potentially a House leadership job, wasted no time in trying to blunt criticisms of the pact, especially from fellow conservatives.

“In divided government, you don’t always get what you want,” Ryan declared.

But he added, “I think this agreement is a clear improvement on the status quo. This agreement makes sure that we don’t have a government shutdown scenario in January. It makes sure we don’t have another government shutdown scenario in October. It makes sure that we don’t lurch from crisis to crisis.”

It would blunt the effect of automatic “sequester” spending cuts by allowing federal agencies and discretionary programs to spend US$63 billion (NZ$75 billion) more over two years, while savings are made elsewhere. It also would provide an additional US$20 billion to US$23 billion (NZ$24 billion to $27 billion)  in deficit reduction over 10 years.

This is a pretty good outcome. Obama and the Democrats didn’t get any tax increases, and the level of spending is slightly less than it would have been under the automatic sequester. Also the Democrats didn’t get an extension in what was meant to be temporary unemployment insurance.

Not a great deal for either side, but a workable one.


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