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131125 Budget Conference Why This is a Good Deal Doc

131125 Budget Conference Why This is a Good Deal Doc

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Published by Ezra Klein
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Published by: Ezra Klein on Dec 18, 2013
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09/17/2014

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The Bipartisan Budget Act of 2013 is a Good Deal for Families, Communities, and the Economy
The Senate and House budgets coming in to the conference to be reconciled were radically different not just in the solutions they offered, but also in the challenges each identified as top priorities. The highest priority of the Senate Budget was investing in jobs and the economy by fairly replacing sequestration and making other key investments in future growth. The Senate Budget also continued to reduce the deficit fairly and responsibly in a way that kept the promises we have made to seniors and families and called on the wealthiest Americans and biggest corporations to pay their fair share.
The House Budget’s highest priority was balancing the budget in ten years and tackling our long
-term deficit challenges right away. It did that by making drastic cuts to Medicaid and other programs families and seniors depend on and by restructuring Medicare into a voucher program. At the same time, it called for dramatic tax rate reductions for the wealthiest Americans and biggest corporations, while locking in deepened sequestration for non-defense investments. The Bipartisan Budget Act of 2013 that came out of the budget conference is not everything Democrats would have done on their own, but it aligns with the values and priorities of the Senate Budget, rejects the harmful proposals from the House Budget, and lays a strong foundation for continued work to create jobs and boost the economy.
The agreement rolls back sequestration cuts using both spending cuts and new revenue.
The Bipartisan Budget Act of 2013 rolls back $63 billion in sequestration cuts scheduled to go into effect in fiscal years 2014 and 2015 and replaces them with a mix of responsible spending cuts and new revenue. Under the agreement, the topline discretionary spending level for fiscal year 2014 would increase to $1.012 trillion, divided between $520 billion in defense spending and $492 billion in non-defense spending. The topline discretionary spending level for fiscal year 2015 would increase to $1.014 trillion, divided between $521 billion in defense and $492 billion in non-defense spending. The sequestration replacement consists of $35 billion in new revenue, $6 billion in defense savings, and $22 billion in savings from mandatory programs spread out over the next ten years. The agreement is able to achieve $23 billion in additional deficit reduction because it extends sequestration of certain mandatory programs in fiscal years 2022 and 2023.
This deal sets budget levels that are much closer to the Senate Budget than the House Budget.
The Bipartisan Budget Act of 2013 maintains defense discretionary spending at roughly current levels and increases non-defense discretionary spending significantly by replacing almost two-
thirds of this year’s cuts.
Under the agreement defense investments are protected from the $20 billion cut scheduled to take effect in January, which military leaders and elected officials on both sides agreed would be devastating. At the same time, key domestic investments will move closer to levels set in the Senate Budget.
 
$34 $6 $23
Balanced Savings To Roll Back Sequestration In FY14 And FY15
(In billions)
RevenueDefense SavingsMandatory Savings
*Does not include additional BBA 2013 savings in FY22 and FY23. Defense savings come from defense mandatory spending.
 
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In fact, this deal brings defense discretionary spending closer to the level set in both the Senate and House budgets, while bringing non-defense discretionary spending $77 billion above the House level and only $14 billion below the Senate level.
(Fiscal Year 2014, $s in billions)
Democrats overcame Republican leaders who were fighting to keep sequestration in place.
 
Though many Republicans fought to keep sequestration in place, the Bipartisan Budget Act of 2013 rolls back automatic cuts from sequestration in fiscal years 2014 and 2015 and shows that the remaining years of sequestration will need to be replaced in a balanced way. This deal demonstrates that there is a majority coalition of Democrats and Republicans who want to replace sequestration, so the debate going forward will be about how, not whether, we should replace the remaining years of automatic cuts. While many Republicans agree with Democrats that sequestration is damaging to both defense and non-defense priorities, others see it as a conservative victory and have pushed for the Budget Control Act sequester caps to be preserved. Some Republicans
suggested that their party should “bank a win” on sequestration,
insisted that the debate over
 
414 492 506 4004254504755005255502014 HouseBudgetBBA 20132014 SenateBudget
Non-Defense Comparison
552 520 552 4004254504755005255502014 HouseBudgetBBA 20132014 SenateBudget
Defense Comparison
61.14% 41.51% 0.00%25.00%50.00%75.00%100.00%Non-DefenseDefense
Percentage of Discretionary Sequestration Replaced In FY14
498 520 485490495500505510515520525FY14 Sequester LevelsBipartisan Budget Act
$22.4 Billion In Defense Funding Restored For 2014
 
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replace
ment is “in the rearview mirr
or,
 
and even said “a brief postponement of the scheduled cuts would set a precedent, making it virtually impossible to reinstate them later.”
1
 By staying united around the need to replace sequestration and making it one of the focuses of the budget conference, Democrats were able to show that there is bipartisan support for replacing sequestration and that moderate Republicans are willing to buck party leadership to reduce the impacts of the automatic cuts. The Wall Street Journal even called efforts by Republican appropriators and defense advocates
to replace sequestration an “uprising.”
2
 If sequestration is rolled back for this fiscal year and the next, there will be intense pressure from advocates and from communities across the country to address it in the remaining years, making it even more likely that Republicans who have already supported replacing sequestration will do so again.
This deal prevents Band-Aid approaches to dealing with sequestration that would fail to solve the underlying problem of unworkable funding levels.
Without the Bipartisan Budget Act of 2013, the alternative almost certainly would be a continuing resolution locking in funding at sequestration levels for the rest of the year. And if the cuts from sequestration are not replaced now, they will be even harder to replace and inadequate fixes for sequestration, like
“flexibility” and “smoothing
,
will be difficult to avoid.
Democrats secured a fair replacement and continued the precedent that sequestration cannot be replaced with spending cuts alone.
Since sequestration went into effect, Democrats have emphasized the need to fairly replace sequestration with a combination of responsible spending cuts and new revenue. Democrats have also highlighted the need to preserve the 50-50 split between defense and non-defense sequestration (the firewall) and not allow the defense cuts to be fixed without equal solutions on the non-defense side. This budget deal accomplishes both. The deal maintains the principle that sequestration should not be replaced with spending cuts alone and that defense cuts should be replaced with revenue and/or other defense savings. Of the $63 billion in sequestration replaced, $35 billion comes from revenue and $6 billion from other defense savings. Many Republicans fought to eliminate the firewall and pushed ideas that would have only disguised major problems on the defense side and done absolutely nothing to help on the non-defense side.
3
 But Democrats on the budget conference held strong to make sure the Bipartisan Budget Act of 2013 rolls back sequestration for both defense and non-defense discretionary spending and maintains the critical firewalls that protect non-defense investments now and in the future.
Democrats successfully fought off Republican efforts to slash Medicare, Social Security, and Medicaid benefits.
Going into the budget conference, Republicans said that their highest priority was cutting Medicare, Social Security, and Medicaid benefits. Many Republicans stated that if sequestration was to be replaced at all, it would have to be entirely with
cuts to these programs that seniors and our most vulnerable citizens depend on. Reuters reported that “if Democrats are
unwilling to offer cuts to benefits programs that make up some two-thirds of federal spending, Republicans are vowing to
keep the sequester cuts in place.”
 While Democrats fought to replace more of sequestration in the agreement, Republicans made clear that any additional replacement would require deep cuts to programs Democrats know are critical for struggling seniors and families across the country. There are policy changes in the deal that Democrats would not have done on our own, but we fought against the unfair Republican proposals that would have slashed or made extreme structural changes to programs families and seniors depend on
and the bipartisan deal does not cut Medicare, Social Security, or Medicaid benefits by a penny.
1
 ConservativeHQ.com, 2/26/13, CQ Roll Call, 6/26/13, National Review, 11/27/13. 
2
 Wall Street Journal,12/3/13. 
3
 CQ, 11/13/13. 

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