Budget deal would avert shutdown, cut federal workforce

Congressional negotiators announced a $1.01 trillion budget agreement on Tuesday that would avoid another government shutdown but deliver an additional round of cuts to federal employees in Maryland.

The two-year deal would replace $63 billion in across-the-board spending cuts known as sequestration with more targeted budget changes, including higher retirement contributions for newly hired federal workers and an increase in airline ticket fees.

In a rare moment of bipartisanship, President Barack Obama and House Republican leaders expressed support for the plan, noting that it would end a cycle of budget brinkmanship that has gripped Washington for three years and that led to a 16-day government shutdown in early October.

"This agreement doesn't include everything I'd like — and I know many Republicans feel the same way," Obama said in a statement. "That's the nature of compromise."

But senior lawmakers who brokered the hard-fought deal might face an even bigger challenge in selling it to conservative Republicans. Many are wary of trading the guaranteed, $109 billion in cuts included in sequestration with out-year reductions called for in the deal.

And some Democrats, while generally positive about the agreement, said they are concerned about $12 billion in cuts proposed for military and civilian federal employees. Maryland is home to some 300,000 federal employees, about 10 percent of the state's workforce.

"They negotiated a fair agreement," Sen. Ben Cardin, a Maryland Democrat, said in an interview, "although I'm disappointed that there's anything in there concerning the federal workforce."

Cardin said he isn't sure how he will vote.

House leaders hope to bring the deal to a vote by Friday, the day the chamber is to adjourn for Christmas. If the vote fails, Congress would have until Jan. 15 to pass a stopgap budget and avoid another government shutdown.

If the House passes the measure, it would go to the Senate next week.

Lawmakers from both parties are eager to avoid the arbitrary sequester cuts that began last spring, but some tea party conservatives prefer those reductions as a way to keep federal budget deficits in check.

Republican Sen. Marco Rubio of Florida, considered a possible presidential candidate in 2016, said he opposes the deal.

"This budget continues Washington's irresponsible budgeting decisions by spending more money than the government takes in," he said, adding that the American people "deserve better."

The agreement sets 2014 spending at $1.012 trillion, higher than the $967 billion under the sequester, but less than Democrats had wanted. There are no new taxes, as Republicans insisted. The new spending is paid for with new fees and cuts elsewhere in the federal budget.

New federal workers hired after Dec. 31 would pay 1.3 percentage points more toward their retirement — or 4.4 percent of their salary. The change is similar to one Congress made early last year that increased retirement contributions for new federal hires to offset the cost of extending a payroll tax break.

The proposal would also reduce cost-of-living adjustments for working-age military retirees, tying those increases to the rate of inflation minus 1 percent.

Federal employees have been working under a pay freeze since 2010 and while they received retroactive pay after the shutdown, they were not made whole for furloughs caused by sequestration.

Many Democrats defended the plan — and the federal workforce cuts — arguing that without a deal, federal workers would likely face another round of sequestration that could lead to more furloughs. Some Republicans initially sought a higher federal retirement contribution, in the neighborhood of 5.5 percent.

Rep. Chris Van Hollen, one of 29 lawmakers who negotiated the deal, called it "a good step forward" in a statement that did not mention the federal workforce.

"This agreement isn't perfect, but it is certainly better than no agreement at all," the Montgomery County Democrat said.