Senate sends budget to Obama

The Senate on Wednesday gave final passage to a two-year budget plan in a 64-36 vote.

Nine Republican senators voted with 55 Democrats and Independents to pass the budget deal, which sets top-line spending levels for 2014 and 2015, allowing appropriators to get to work on an omnibus spending bill for the current fiscal year.

{mosads}While Congress will have to approve that package to prevent another government shutdown after Jan. 15, the bipartisan votes in the House and Senate have raised hopes that Washington is moving on from years of budgetary showdowns.

The vote in the Senate was closer than in the House, where majorities in each party backed the compromise negotiated by Budget Committee Chairwoman Patty Murray (D-Wash.) and her House counterpart, Rep. Paul Ryan (R-Wis.).

GOP Sens. Ted Cruz (Texas), Marco Rubio (Fla.) and Rand Paul (Ky.), seen as possible 2016 presidential candidates, all voted against the deal, as did GOP Leader Mitch McConnell (Ken.), who faces a tough primary challenge. That contrasted with the House, where GOP leaders and Ryan, another possible White House hopeful, backed the deal.

Conservatives opposed the measure because it reduces the automatic spending cuts known as the sequester by $63 billion over the next two years. They argued the bill includes budgetary gimmicks that could be turned off by future Congresses to make up for the lost cuts.

But the reduced sequester cuts made the bill popular with Democrats and some Republicans, who have warned that the arbitrary cuts would hurt the Pentagon, which faced an additional $20 billion cut in January without the deal.  

To make up for those cuts, the deal includes a number of other spending cuts and increased user fees that total $85 billion over 10 years. Ryan and Murray said the deal as a result would reduce budget deficits by more than $23 billion.

Yet the agreement falls far short of the “grand bargain” negotiations held by President Obama and Speaker John Boehner (R-Ohio) in 2011, when significant entitlement cuts and tax hikes were on the table. It is well short of the $4 trillion deal that many deficit hawks say is necessary to tame the national debt.

The agreement does little to change the trajectory of federal deficits, which have declined with an improving economy but are slated to expand in the long run as Medicare and Medicaid costs rise higher.

Appropriators are already in talks on a $1.012 trillion spending bill for this fiscal year. The deal will also allow appropriators to work on new spending bills for fiscal 2015. A package of detailed appropriations bills has not passed Congress since 2011.  

The White House backs the bill, and Senate passage will send it to Obama for his signature.

The bill approved by the Senate also includes a provision to prevent a cut in physician payments under Medicare known as the “doc fix.” It would give Medicare doctors a 0.5 percent payment increase through the end of March, paying the $8.6 billion tab with cuts to hospital funding in the future. 

The bill would reduce future federal employee retirement benefits by $6 billion and cut military retiree benefits by $6 billion, something that sparked controversy this week. Democrats had demanded that military personnel share in the sacrifice with federal employees, and some Republicans, such as Sen. John McCain (Ariz.), have said military benefits need to be reigned in.

There is already a bipartisan effort in the Senate to try to turn off the military cuts before they take effect in 2015, however. Armed Services Committee Chairman Carl Levin (D-Mich.) is leading the charge, and Murray said lawmakers would have time to replace that cut with other savings.

The bill raises airline passenger fees from $2.50 to $5.60 per ticket, and includes $28 billion in future cuts to Medicare fees. The deal also uses revenue from new oil drilling in the Gulf of Mexico and from higher premiums on government-backed private sector pensions.

Though 12 GOP senators voted with Democrats on Tuesday to end debate, Republicans who opposed the bill insisted on using all 30 hours of post-cloture debate. Budget Committee ranking member Sen. Jeff Sessions (R-Ala.), who was left out of the Ryan-Murray talks, was the deal’s loudest critic.

“I do not believe this legislation is sound,” Sessions said. “I think it takes us down the road of eroding an individual’s power to restrain spending.”

Murray responded in her final floor comments that it could help prevent a government shutdown.

“If we didn’t get a deal we would have faced another continued resolution that would have locked in those damaging cuts or worse — a potential government shutdown in just a few weeks,” Murray said. “It is a step in the right direction and a dramatic improvement of the status quo.”

Some lawmakers say the breakthrough raises the possibility for deals next year, including on immigration reform. Advocates for immigration were happy last week when Boehner criticized outside conservative groups for criticizing the deal.

The next challenge will come in February and March, when a showdown looms over raising the debt ceiling.