America gets a budget deal – just don’t mention tax and welfare

Congress to avoid another federal shutdown with bipartisan pact

New York

Americans woke up to an unusual show of bipartisan co-operation on Capitol Hill after politicians agreed a two-year budget deal aimed at breaking a damaging cycle of shrill political battles over the country’s finances, intended to avoid a repeat of the embarrassing government shutdown this year.

However, while trumpeting a ceasefire over government spending, leaders failed to agree on proposals to extend support for the more than one million people who are set to lose their unemployment benefits later this month. 

Democrats and Republicans presented the deal that was agreed late on Tuesday evening as an imperfect but important compromise that would allow Congress to function with less political brinkmanship, staving off the prospect of another government shutdown early next year and providing s safeguard for the US economic recovery.

The pact, worth around $85bn (£52bn), does not tackle the thorny business of reforming costly government welfare programmes, nor does it address the question of overhauling the tax code. Proponents from both sides argued the agreement would ensure that the national government would continue functioning while negotiations over the outstanding issues progress.

“We understand that in this divided government, we’re not going to get everything we want,” said Paul Ryan, the Republican chair of the House Budget Committee who led the talks on behalf his party.

President Obama struck a similar tone, acknowledging the limits of the agreement but welcoming the prospect of a more orderly budget  process. “This agreement doesn’t include everything I’d like – and I know many Republicans feel the same way,” he said. “But it’s a good sign that Democrats and Republicans were able to come together and break the cycle of short-sighted, crisis-driven decision-making to get this done.”

If approved by Congress, the deal would finance the federal government until late 2015 and reduce the size of the automatic spending cuts known as the sequester by around $63bn over the course of the next two years. To pay for that, higher revenues will be sought from other sources such as air passenger fees. Newly hired federal workers will also take a hit, as they’ll be asked to cough up more in pension contributions. By introducing new cuts further down the road, the deal would also trim the US deficit over the course of the next decade by $23bn, a nod to conservative demands.

But the pact is silent on the debt ceiling (the congressionally mandated limit on the amount of money that the Treasury can borrow at any given time), meaning that while the federal agencies might not shut down next year, disagreements between the two parties could yet trigger another damaging showdown over government finances in Washington.

Nor does the agreement deal with what until recently was a key Democratic demand: extending emergency federal benefits for Americans who have been out of a job for over six months. As things stand, around 1.3 million people are at risk of losing their benefits when an emergency programme expires over the holiday period, on 28 December.

The agreement did not include measures to extend emergency benefits for those who have been jobless for more than six months (Rex) The agreement did not include measures to extend emergency benefits for those who have been jobless for more than six months (Rex)
Earlier, some Democrats had pressed for a one-year extension to the programme. But the Republican leadership is said to have baulked at the $25bn price-tag.

While some Democrats – particularly those with large numbers of federal workers in their district who would have an easier time next year if the agreement is implemented – welcomed the pact, others voiced concerns about the lack of provisions to help out the long-term unemployed. Speaking to C-Span, John Lewis, a Democratic House member from Georgia, said: “I don’t want this budget to be done on the backs of the people who are most vulnerable.”

Another Democrat in the House, Joe Crowley of New York, told Politico that the deal on the table was not “representative of the value of our whole conference.”

The leader of the Democratic minority in the House, Nancy Pelosi, did not give a firm answer on whether she would support the agreement, saying, “We haven’t even seen the final product”. However, she added that “it’s unconscionable that we could consider leaving Washington DC [for the holidays] without extending these benefits.”

There was also some opposition among conservatives, with right-wingers challenging any deal that reduces spending cuts. Tim Huelskamp, a Republican Congressman allied with the Tea Party movement, signalled he was against a deal, telling The Washington Post: “Republicans said they wanted to reduce spending; this bill does exactly the opposite. I don’t think it’s a good deal.”

The conservative group Heritage Action for America also weighed in against the agreement, calling it “a step backward.” “Some are heralding the agreement as an indication politicians can put aside their petty differences and achieve something,” the group’s chief executive, Michael Needham, wrote in USA Today. “In the coming days, members of Congress will have to explain to their constituents what exactly they achieved by increasing spending, increasing fees and offering up another round of promises waiting to be broken.”

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: 3rd Line Virtualisation, Windows & Server Engineer

£40000 - £47000 per annum: Recruitment Genius: A 3rd Line Virtualisation / Sto...

Recruitment Genius: Refrigeration and Air Conditioning Service Engineer

£26000 - £35000 per annum: Recruitment Genius: A successful national service f...

Recruitment Genius: Business Development Executive / Sales - OTE £25,000

£15000 - £25000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Sales Administrator - Fixed Term Contract

£17500 - £20000 per annum: Recruitment Genius: We currently require an experie...

Day In a Page

Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

‘We won’t stop until Syria is back to normal’

Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

The inside story of how Bill Clinton built a $2bn global foundation...

... and how it may undermine Hillary's chances in 2016
12 best olive oils

Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

Benitez full of emotion at Bernabeu homecoming

There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
Sepp Blatter resignation: The beginning of Fifa's long road to reform?

Does Blatter's departure mean Fifa will automatically clean up its act?

Don't bet on it, says Tom Peck
Charles Kennedy: The baby of the House who grew into a Lib Dem giant

The baby of the House who grew into a Lib Dem giant

Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

The harrowing testament of a five-year-old victim of Syria's endless civil war

Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
The future of songwriting: How streaming is changing everything we know about making music

The future of songwriting

How streaming is changing everything we know about making music
William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

Recognition at long last

Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
Beating obesity: The new pacemaker which helps over-eaters

Beating obesity

The new pacemaker which helps over-eaters
9 best women's festival waterproofs

Ready for rain: 9 best women's festival waterproofs

These are the macs to keep your denim dry and your hair frizz-free(ish)
Cycling World Hour Record: Nervous Sir Bradley Wiggins ready for pain as he prepares to go distance

Wiggins worried

Nervous Sir Bradley ready for pain as he prepares to attempt cycling's World Hour Record
Liverpool close in on Milner signing

Liverpool close in on Milner signing

Reds baulk at Christian Benteke £32.5m release clause
On your feet! Spending at least two hours a day standing reduces the risk of heart attacks, cancer and diabetes, according to new research

On your feet!

Spending half the day standing 'reduces risk of heart attacks and cancer'
With scores of surgeries closing, what hope is there for the David Cameron's promise of 5,000 more GPs and a 24/7 NHS?

The big NHS question

Why are there so few new GPs when so many want to study medicine?