Senate approves two-year bipartisan budget agreement

30 Oct 2015 | Author: | No comments yet »

Obama wins US debt-limit, budget truce through end of presidency.

President Barack Obama on Friday morning welcomed a two-year budget deal passed by the Senate in the pre-dawn hours in hopes of breaking a ‘cycle of shutdowns and manufactured crises that have hurt the U.S. economy.The Senate passed a bipartisan deal to suspend the debt limit early Friday morning, but not before libertarian darling and presidential candidate Rand Paul mounted what he referred to as a filibuster against the bill. (Really it was just a 20 minute speech). At about 3 a.m, senators voted 64-35 for the measure that will spare the nation the specter of a catastrophic debt default and partial government shutdown. The Senate voted 64-35 to approve the measure, which was negotiated over the past few weeks by the White House and congressional leaders, including former House Speaker John Boehner, who retired from Congress.

The legislation passed by a vote of 64-35 after overcoming objections from conservative senators, including presidential candidates Rand Paul (R-Ky.) and Ted Cruz (R-Texas), that forced a rare series of votes at 1 a.m. Without action by Congress, the Treasury Department would have exhausted the last of its borrowing capacity on November 3, according to Treasury Secretary Jack Lew, and risked default on US obligations within days that would roil global financial markets. While it’s true that the main drivers of federal spending–Social Security and Medicare–are entitlement programs whose costs rise automatically without annual Congressional approval, they are still programs that were approved by Congress. The two-year budget provision provides new top-line spending levels for Congress for the fiscal year that began October 1 and the one starting October 1, 2016. To offset this cost, negotiators tapped a number of sources, including making changes to Medicare and Social Security, auctioning off government-controlled wireless spectrum, selling crude oil from the Strategic Petroleum Reserve and tightening tax rules for business partnerships.

In addition, the legislation will limit a historic premium increase for some Medicare Part B beneficiaries, set to go into effect next year, for services like hospital care and doctor visits. The deal increases government spending by $80 billion, split equally on domestic and defense programs and ends months of turmoil among GOP members of both chambers. Obama called on Congress to build on the budget “by getting to work on spending bills that invest in America’s priorities without getting side-tracked by ideological provisions that have no place in America’s budget process.” Conservative Republicans are likely to try to attach controversial policy add-ons, such as prohibiting funding for women’s healthcare provider Planned Parenthood to punish the group for an abortion-related controversy involving foetal tissue. It allows the federal debt limit to be extended until March 2017, after Obama leaves office, and for Republicans it removes a major distraction that could have impeded their re-election campaigns next fall. The cost-saving revisions include allowing some recipients who can still work to receive partial payments while earning outside income, and expanding a program requiring a second medical expert to weigh in on whether an applicant is legitimately disabled.

Senators were resigned to the late-night vote, with some saying they expected a vote to cut off debate and one on final passage to occur about 1 a.m., when their disgruntled colleagues would have less incentive to give floor speeches denouncing the agreement. Cruz, for his part, said the Republican majorities in both the House and Senate had given Obama a ‘diamond-encrusted, glow-in-the-dark Amex card’ for government spending.

Republican Senator Rand Paul, who is running for the Republican nomination for president, complained in a floor speech: “The right’s going to get more military money. Paul criticized Senate leaders for caving into demands from Democrats to negotiate on spending rather than using the upcoming debt limit deadline to force President Obama to make spending cuts. Besides settling the federal budget for the 2016 and 2017 fiscal years, the agreement removes the threat of an unprecedented national default just days from now.

The deal would also avert a looming shortfall in the Social Security disability trust fund that threatened to slash benefits, and head off an unprecedented increase in Medicare premiums for outpatient care for about 15 million beneficiaries. He also said it would “enact the most significant reform to Social Security since 1983.” The estimated $168 billion in long-term savings from the program would be achieved by clamping down on medical fraud and excess claims associated with disability benefits.

Boehner said he wanted to “clean out the barn” before handing over the gavel, rather than leave his successor with a pile of messy budget business to handle just as they assumed the job. The cuts include curbs on Medicare payments for outpatient services provided by certain hospitals and an extension of a 2-percentage-point cut in Medicare payments to doctors through the end of a 10-year budget. Conservatives in both chambers criticized the deal both because it was hatched behind closed doors rather than through the committee process and because they argued it is bad policy. Many complained that the provisions in the bill that are used to offset the cost of the new spending are gimmicks or promise savings in the future for money the government will spend immediately. “This wasn’t a slapdash on a post-it note last night,” Cruz said. “This represents days or weeks or months of negotiations. This represents the Cartel in all of its glory because this is the combined work product of John Boehner and Nancy Pelosi and Mitch McConnell and Harry Reid.” Once the bill is signed into law, the Appropriations Committees will begin the process of writing an omnibus bill that will determine how the funds will be spent.

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