'Patty Murray and Paul Ryan have reached a budget deal that would add about $63 billion to discretionary spending, partially reversing the deficit-reduction scheme known as the "sequester." While the plan is a small step in the right direction, it does almost nothing to mitigate a decades-long decline in public investment and discretionary spending.'
'For most of this year, the brutal cuts to federal spending known as the sequester have wreaked havoc on important programs, cutting off hundreds of thousands from Head Start and low-income housing assistance, setting back scientific research and environmental protection, and costing more than a million jobs. Getting rid of the sequester for domestic programs was a high priority for Congressional Democrats, and they achieved much of what they wanted in a budget deal reached on Tuesday that in other important respects was disappointing.
The deal will cancel 61 percent of the sequester cuts for nondefense discretionary domestic programs this fiscal year, adding back $31.5 billion over the next two years to be divided among departments like transportation, education, and health and human services. That's a significant achievement, considering that many Republicans want those cuts to continue in perpetuity.
Paul Ryan, the House negotiator, ignored the Tea Party's insistence that the sequester was untouchable, agreeing to raise discretionary spending in 2014 by $77 billion above his own budget proposal. Patty Murray, the Senate negotiator, resisted Republican demands for new cuts to safety-net programs. As a result, money will soon start flowing to programs that have been starved all year.'
'With the clock quickly winding down on the legislative year, Congress has cobbled together a budget deal, something they have failed to do since April 2009. The details have yet to be finalized, but many are praising it as a return to regular order, ending the budget brinksmanship that has dominated Washington for most of Harry Reid's tenure as Senate Majority Leader. Unfortunately, the budget deal breaches the spending caps created under sequestration-the only measure of fiscal discipline that has made it through Congress in recent years-in exchange for promises of budget cuts down the road…
Many in Congress claim the boost in discretionary spending is more effective fiscal policy than the arbitrary and damaging across-the-board reductions in spending mandated by sequestration. In reality, the budget deal abandons the only mechanism that has limited federal spending in the 113th Congress. In fact, sequestration provided an opportunity to address politically charged fiscal decisions on defense spending, giving cover to members of Congress who could point to sequestration as the reason for the cuts. Instead, the budget deal appears to be creating another round of short-term spending increases for some promise of spending cuts at some point in the future.
At the same time, it is difficult to identify economic harms created by sequestration. The latest jobs report was better than expected, with unemployment dropping to a five-year low of 7 percent. Growth in gross domestic product accelerated by 3.6 percent in the third quarter of 2013, and, according to the Federal Reserve, household net worth increased to $77.3 trillion in the third quarter-$1.9 trillion higher than at the end of the second quarter. While the economy clearly continues to struggle, things are moving in the right direction. Sequestration has little effect on the underlying economic fundamentals one way or the other, but it does have political implications for a Congress seeking to spend more money.'