Budget

Budget deal would avert threat of January shutdown

Placeholder Image for Article Template

The threat of a Jan. 15 government shutdown receded as the leaders of the Budget committees in the House and Senate agreed on a two-year deal that deflects some of the cuts imposed by sequestration in the near term while extending the sequester regime by two years, through 2023.

Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.) essentially agreed to split the difference between their two budgets on discretionary spending. The final deal calls for $1.012 trillion in spending for fiscal 2014, with $520.5 going to defense and $491.8 billion to non-defense agencies. It taps the brakes on sequestration cuts, with a reduction of about $45 billion in fiscal 2014 and $18 billion in fiscal 2015.

"In divided government, you don't always get what you want," Ryan said in a Capitol Hill press conference on Dec. 10.

Opposition from House Republicans appears to be the biggest political hurdle to the agreement. Ryan urged House Republicans to vote for the plan because the deal contains no tax increases, extends the regime of automatic budget cuts, takes aim at improper payments and moves toward reining in federal pension costs.

Murray said at the joint press conference that she made the deal in consultation with Senate leaders, and the White House issued a statement saying President Barack Obama would sign the bill.

If the deal is passed, appropriators would be able to write spending bills for the remainder of fiscal 2014 and full appropriations for fiscal 2015 based on the measure's caps.

"This deal allows congressional committees to proceed under regular order, and gives government agencies and the companies that do business with them the certainty they need to hire workers and make investments," Murray said.

Changes to retirement benefits

Changes to military and civilian federal employee pensions figure into the $63 billion in sequester relief and $23 billion in deficit reduction promised under the deal. Federal employees hired in 2014 and beyond will contribute 4.4 percent of their salaries toward retirement, an increase of 1.3 percentage points from the current rate of 3.1 percent. Feds returning to the government with more than five years of service will be exempt from the increase.

"Nothing in this agreement affects current federal employees," said Rep. James Clyburn (D-S.C.), a member of the conference committee that negotiated the deal. "All of this has to do with federal employees who will be going to work for the government after Jan. 1, 2014."

The largest federal employees union opposes the deal because of the increase in contributions to defined benefit pensions for newly hired employees.

"The result will be a serious shortfall in their retirement income security and a substantial lowering of their standard of living," said J. David Cox Sr., national president of the American Federation of Government Employees, in a statement.

On the military side, the deal reduces the cost-of-living adjustment for working-age military retirees. A 0.25 percent decrease will hit in December 2014, followed by a 0.50 percent reduction in December 2015. The deal does not reduce retirement benefits from one year to the next, nor does it affect injured or disabled veterans.

A new cap on contractor compensation

The deal also reduces the cap on contractor executive compensation on federal contracts to $487,000. The Obama administration recently announced an increase to the cap from $763,029 to $952,308. The Ryan-Murray deal allows for "narrowly targeted exceptions for scientists, engineers or other specialists," but such exceptions will be limited, and Congress will have to be kept in the loop through an annual report on contractor compensation from the Office of Management and Budget. Additionally, the deal repeals OMB's authority to set annual increases.

The contractor compensation measure is competing against a similar provision in the defense authorization bill agreed to by the House and Senate Armed Services committees earlier this week. That bill proposes a $625,000 cap on contractor compensation and includes exceptions for certain high-tech categories, including cybersecurity.

Stan Soloway, president of the Professional Services Council, said the rate in the defense bill represents a reasonable compromise that the Ryan-Murray measure threatens to upset.

"This is not about egregious salaries," he told FCW. "It's about enabling industries to compete for the right kind of talent to support the government."

It's unclear how the two measures will be resolved if both pass.

Still, Soloway said he is pleased to see the prospect of a January shutdown dimmed. "Getting the budget deal done is critical for federal agencies to plan and execute programs," he said. "The uncertainty and chaos that has buffeted agencies flows down to external partners, including industry."

About the Author

Adam Mazmanian is executive editor of FCW.

Before joining the editing team, Mazmanian was an FCW staff writer covering Congress, government-wide technology policy, health IT and the Department of Veterans Affairs. Prior to joining FCW, Mr. Mazmanian was technology correspondent for National Journal and served in a variety of editorial at B2B news service SmartBrief. Mazmanian started his career as an arts reporter and critic, and has contributed reviews and articles to the Washington Post, the Washington City Paper, Newsday, Architect magazine, and other publications. He was an editorial assistant and staff writer at the now-defunct New York Press and arts editor at the About.com online network in the 1990s, and was a weekly contributor of music and film reviews to the Washington Times from 2007 to 2014.

Click here for previous articles by Mazmanian. Connect with him on Twitter at @thisismaz.


The Fed 100

Save the date for 28th annual Federal 100 Awards Gala.

Featured

  • computer network

    How Einstein changes the way government does business

    The Department of Commerce is revising its confidentiality agreement for statistical data survey respondents to reflect the fact that the Department of Homeland Security could see some of that data if it is captured by the Einstein system.

  • Defense Secretary Jim Mattis. Army photo by Monica King. Jan. 26, 2017.

    Mattis mulls consolidation in IT, cyber

    In a Feb. 17 memo, Defense Secretary Jim Mattis told senior leadership to establish teams to look for duplication across the armed services in business operations, including in IT and cybersecurity.

  • Image from Shutterstock.com

    DHS vague on rules for election aid, say states

    State election officials had more questions than answers after a Department of Homeland Security presentation on the designation of election systems as critical U.S. infrastructure.

  • Org Chart Stock Art - Shutterstock

    How the hiring freeze targets millennials

    The government desperately needs younger talent to replace an aging workforce, and experts say that a freeze on hiring doesn't help.

  • Shutterstock image: healthcare digital interface.

    VA moves ahead with homegrown scheduling IT

    The Department of Veterans Affairs will test an internally developed scheduling module at primary care sites nationwide to see if it's ready to service the entire agency.

  • Shutterstock images (honglouwawa & 0beron): Bitcoin image overlay replaced with a dollar sign on a hardware circuit.

    MGT Act poised for a comeback

    After missing in the last Congress, drafters of a bill to encourage cloud adoption are looking for a new plan.

Reader comments

Thu, Dec 12, 2013 Billy Mid-America

I guess when your approval rating is down to 9% it's a good idea to finally do SOMETHING!

Thu, Dec 12, 2013 Dave Millington, TN

Seems as though someone up there in DC has finally relaized what we peasants have known all along - you don't always get everything you want - you have give a little!! I hope this deal passes because it'll mean 18 months of work without worry of new cuts and furloughs!!

Please post your comments here. Comments are moderated, so they may not appear immediately after submitting. We will not post comments that we consider abusive or off-topic.

Please type the letters/numbers you see above

More from 1105 Public Sector Media Group