I don’t know about you, but I am sick and tired of continuing resolutions and the uncertainty for the US economy that accompanies them. The two-year budget deal that passed the House handsomely last Thursday and goes before the Senate this week is an opportunity to restore confidence to a shaky economy, while improving Republican political positioning going into a debt limit negotiation in February. The deal is also the best compromise between the two parties that we could hope for in the current era of hyper-partisan gridlock.
The Bipartisan Budget Act of 2013 includes alleviation of sequestration, with a total of $63 billion worth of relief for the across the board cuts that went into effect in March. The relief will be split equally amongst defense and non-defense discretionary spending, with $45 billion worth of relief coming in 2014, and another $18 billion in 2015. Sequestration levels for 2016-2021 remain in effect. Virginia in particular will gain from the sequestration relief with military and defense spending affecting the Virginia economy more heavily than any other state.
Another reason why the budget deal is good for the country is that it makes an attempt to bring the runaway costs of government contracting under control. The bill would cap the amount a government contractor can charge the federal government at $487,000. The field of defense contracting has become so bloated over the past decade, with defense contractors being paid far and beyond what servicemen and women make for similar duties in many cases. According to General Martin Dempsey, Chairman of the Joint Chiefs of Staff, defense contracting has expanded from six troops per contractor during the Revolutionary War, to less than one per service member today. If the pensions of soldiers and federal workers are targeted with 1.3% increases in employee contributions, contractors must be subject to changes in budgeting priorities as well.
The budget act will reduce the deficit between $20 and $23 billion. This figure does not reflect total deficit reduction however. More than 50 tax incentives are set to expire on December 31st, which range from bio-fuel and clean energy initiatives, to energy efficient appliances. The Congressional Budget Office does not include these in budget savings because they have not yet expired. The expiration of these subsidies will provide for $500 billion worth of deficit reduction over 10 years.
By passing this two year budget plan, Republicans will have more leverage going into debt limit negotiations in February. With shutdowns a thing of the past for some time, there is now more room to continue going after the failure of the Affordable Care Act roll-out, as Republicans can argue that they were fully willing to compromise on a budget that reduced the deficit and attempted to bring Democrats on board. If the GOP continues down the path of brinksmanship and shutdowns, they will obliterate the political capital they have miraculously managed to restore after the previous shutdown in October.
I would urge the Senate to respond to the passage of the Bipartisan Budget Act of 2013 by a House margin of 332-94 by approving it, and sending it to President Obama to put the first budget in over 3 1/2 years into law. It is by no means perfect, but it is the best bipartisan compromise we are going to get.