Representative Paul Ryan and Senator Patty Murray announced a budget deal yesterday. The deal replaces $63 billion in sequester cuts over two years and cuts an additional $23 billion in long term deficits. The deal will restore defense spending. The funding comes from increased fees for air travel and cuts to federal worker pension programs.
Military spending would be set at $520.5 billion this fiscal year, while domestic programs would get $491.8 billion. The $63 billion increase over the next two years would be spread evenly between Pentagon and domestic spending, nearly erasing the impact of sequestration on the military. Domestic programs would fare particularly well because the 2 percent cut to Medicare health providers would be kept in place, alleviating cuts to programs like health research, education and Head Start.
The increase would be paid for in part with higher airline fees that underwrite airport security. Higher contributions from federal workers to their pensions would save about $6 billion. Military pensions would see slower cost-of-living increases, a $6 billion savings over 10 years. Private companies would pay more into the federal Pension Benefit Guaranty Corporation.
The rich were once again spared and yes the carried interest loophole stands. In fact, not a single tax loophole was closed. But at least the war economy has had sequestration reversed, isn’t that what really matters?
Democrats gave up their demand that the deal extend unemployment benefits that expire at the end of the month, but they hope to press for an extension in a separate measure.
And not only will it cut off benefits this deal ensures no programs to stimulate job growth will be passed. It solidifies a do-nothing austerity based posture from the federal government.
The Republicans got everything they wanted. They get more cuts while none of their friends in the defense industry get hurt – actually they even got to do some damage to the federal pension system. All that while avoiding another shutdown that killed their poll numbers before the 2014 elections. Christmas came early for the GOP.
The Democratic Party, on the other hand, sold out its own base to help Republicans maintain power. Why? Who knows? The only thing that is clear is this is an awful deal for majority of Americans.