by Geoff Corey | December 12, 2013
Earlier today, the Bipartisan Budget Act of 2013 advanced in the U.S. House of Representatives, and will likely be enacted. Also known as the Murray-Ryan deal, it would replace $63 billion in scheduled sequester cuts over the next two years by raising an additional $85 billion in revenue and achieving $23 billion in deficit reduction through other means.
Sequestration is a system of mandatory across-the-board spending cuts. These cuts were scheduled to be implemented over ten years (2011 – 2021). Members of both parties have lamented the arbitrary nature of these cuts. Today’s Murray-Ryan deal replaces sequestration in 2014 and 2015 by pushing the sequester cuts into 2022 and 2023 instead. In other words, the deal is more of a two year delay of sequestration than a replacement.
Some important highlights of the Murray-Ryan deal include:
- Spending for Fiscal Year 2014 would be capped at $1.012 trillion ($44.8 billion higher than the sequestration level of around $967.5 billion). This cap would increase to $1.014 trillion for 2015.
- These spending limits do not include funding levels for each governmental agency. The joint resolution would require the House and Senate Appropriations Committees to agree on how to distribute that money to the departments. They could do this by passing a year-long budget, or by passing short-term continuing resolutions as has become common-place. They will likely do this in mid-January.
- The increased revenue and savings come from a range of measures that do not directly affect the design and building industry such as increased airline fees ($5.60 for each one-way trip), and increasing the amount federal employees must contribute to their retirement.
- The debt ceiling is not addressed in this legislation.