12 December 2013, 05:26

US budget agreement still misses a lot of things - VoR report

US budget agreement still misses a lot of things - VoR report
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Congressional negotiators have reached a budget deal that would prevent another government shutdown for the next two years. The proposed legislation finances the government through the fall of 2015 and reduces federal budget deficit by 23 billion dollars. The deal, which “cuts spending in a smarter way”, still has to be approved by the House and Senate. The Voice of Russia correspondent Lyudmila Chernova reports from Washington DC.

Could you tell us a little bit about the agreement and why is it so important?

Just days before the upcoming Friday deadline, key members of Congress have reached a budget agreement to avoid another government shutdown. Well, the agreement called the Bipartisan Budget Act is just the preliminary agreement and still needs to be approved by both House and Senate. And it actually has to pass both chambers by January, 15. As you know, under the deal reached back in October and sixteen-day government shutdown Federal Spending Authority expires exactly on January, 15.

Senator Patty Murray, Democrat from Washington and Republican Paul Ryan from Wisconsin are the head negotiators for this agreement and they both chair the House and the Senate Budget Committee respectively. The details of the deal were unveiled at 6pm at the Press Conference on the Capital Hill last night. And after weeks of closed door negotiations Senator Ryan said that the deal would set spending levels, reduce the deficit, and relieve some of the arbitrary, meaning like forced spending cuts, so its 77 pages bill and it is two year bill that sets the new annual budget cap for 2014-2015 and it is just over one trillion dollars.

The proposal would restore about $33 billion in funding that has been cut by the so-called sequester. Now, according to the officials, the increases would be offset by a variety of different spending reductions and increased fees elsewhere in the budget. It would total about $85 billion over decade. The deal reduces the deficit by $23 billion but it does not raise taxes.

Murray said at the Press Conference that specifically the deal rolls back sequestration cards to education, medical research, infrastructure, investment and defense jobs for the next three years, so by both defense and non-defense programs. Well, more specifically, nearly hired federal workers would be called to make larger contributions to their own pensions and there will be also an increase in federal airport security fee that would add additional $5 to the cost of the typical round trip flight. More savings would come from extending an existent 2% card in payments to providers who treat Medicare patients. Those under age 62 who retired from the military will see a slightly smaller annual cost of living increase.

The agreement still misses a lot of things, for example, it doesn’t trace tax increases for significant cuts to the extensive programs that drives to loans and debt, well, such as Medicare and Social Security. However, many stress that the main significance of this deal is in the deal itself. The House and Senate have failed to agree on any budget since 2009 and of course, this disagreement has the fact on both the national economy and America’s image oversees. Not to mention the damages by the recent shutdown in October.

This agreement was definitely a good sign, a breakthrough. And in the statement senator Murray said “It’s a good step in the right direction that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.” President Obama right after the agreement was reached also praised the deal as “the good step” and urged both parties to continue working to pass the budget based on this agreement. So he can sign it as soon as possible and the economy can continue growing and creating jobs. Well, Paul Ryan also said that the deal was “a clear improvement over a status quo”.

So, as of now, both Senate and the House still has to vote on the agreement and the vote in the House is scheduled for tomorrow so the House is expected to take up the agreement before it recesses for the Christmas holiday and it is scheduled for Fridays as you know, so they are trying to do it as soon as possible. As soon as it passes the House it will be moved to Senate. Well, of course, it is still unclear if it will pass both chambers since the agreement does not include many things that Democrats wanted as well as many things that the Conservatives insisted on, for example, the bill does not include an extension of jobless benefits which are about to expire later this month.

Conservatives might be upset that the full sequester is not enforced, and some authorities have already actually said that they won’t vote for this bill, and these conservatives include Republican from Kansas Tim Huelskamp and Marco Rubio, Republican from Florida. So the opposition is growing in both the Senate and the House. Most believe and hope that actually the bill will pass. House speaker, John Boehner even said he is confident that the house will secure enough votes to pass the bill. And many still don’t say how they will vote on it.

Could you tell us a little bit more about the reaction from both parties? Can we say that both Democrats and the Republicans are sort of satisfied with this deal?

First reaction was actually very positive, as I said, there was no agreement reached from 2009 so for almost 4 years they couldn’t come to an agreement. So that was a real breakthrough, actually it wasn’t too significant since they agreed on things and but still they agreed on something.

The first reaction was very positive from both sides, however, the Tea Party members, some Conservative Organizations, they all started expressing their displeasure with this agreement. More important that Obama praised the deal and so they would actually avoid the government shutdown, that might happen in January.

Later, this morning, it seemed that the opposition inside and outside of the Capital was growing and the Senators oppose mostly Republicans but however, house speaker John Boehner believes that there will be enough votes to pass the bill. Although the opposition is growing and there are a lot of voices who are against that agreement. But most of people still believe that it will pass.

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