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VOL. 37 | NO. 49 | Friday, December 06, 2013

Bipartisan negotiators try for modest budget pact

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WASHINGTON (AP) — The lead Democratic negotiator says she is close to a deal with Republicans on a modest budget agreement that's expected to replace tens of billions of dollars in spending cuts this year and next with longer-term savings and revenue from increased fees.

"We're not there yet but we are working out details and I'm hopeful," Murray said as she entered a meeting where she was expected to brief fellow Democrats on the talks. She said she hopes to announce an agreement by the end of the day.

Murray has been negotiating with House Budget Committee Chairman Paul Ryan, R-Wis.

The two have been holding secretive talks for weeks aimed at producing an accord to replace some, but not all, of the automatic spending cuts known as sequestration. Budget experts and aides briefed on the talks predict that any bargain may replace $65 billion in spending cuts over two years, with half going to the Pentagon and half going to domestic programs. About $45 billion would be devoted to the 2014 fiscal year and about $20 billion to fiscal 2015.

The automatic cuts are the consequence of Washington's failure to follow up a 2011 budget pact with further deficit cuts. They would carve $91 billion from the day-to-day budgets of the Pentagon and domestic agencies when compared with sending limits set by the hard-fought 2011 budget agreement.

The White House, defense hawks and congressional pragmatists are those most eager for an agreement, but it's already attracting opposition from conservatives seeking to preserve spending cuts and liberals unhappy about requiring federal workers to contribute more to their pensions. And Democrats are still seeking to win renewal of federal unemployment benefits for people who have been out of work for six months or more.

The Ryan-Murray talks follow several rounds of failed attempts for larger-scale deficit-cutting agreements that have foundered over taxes and proposals to curb popular programs like Medicare. The framework under discussion would have very little impact on deficits but would assign top line figures to the House and Senate Appropriations committees so they could begin work on a massive spending bill funding government agencies for the budget year that began Oct. 1.

Conservative interest groups like Heritage Action and Americans for Prosperity are already urging Republicans to oppose the measure even before it's been made public. Unions representing federal workers are pressing Democrats to oppose it as well. A group of prominent House conservatives has written to top GOP leaders urging them to preserve the $967 billion spending level required under sequestration.

Instead, the Ryan-Murray framework would raise the agency spending cap for 2014 to $1.012 trillion and $1.015 trillion in 2015. That's still well below the limits envisioned by the 2011 accord.

But the alternative is continued sequestration cuts that have meant furloughs of federal workers, harmed military readiness and forced across-the-board cuts to the approximately $1 trillion portion of the $3.5 trillion federal budget that's set by Congress each year.

"I am really...cautiously optimistic that we have a deal," said Senate Appropriations Committee Chairwoman Barbara Mikulski, D-Md. "No. 2, we get a top line for two years and a partial cancelling of sequester. The good news is we didn't let them shred the social safety net."

The central elements to the potential agreement, aides and budgets experts briefed on the talks say, would be to require federal workers to contribute more to their pensions, increase a post-Sept. 11 security fee to add $5 to the cost of a typical round-trip flight and require corporations whose pension plans are guaranteed by the government to pay higher premiums. Medicaid payments to hospitals that care for a "disproportionate share" of uninsured people may also get cut.

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