Year-end agreement: Budget heads to final passage

WASHINGTON - Year-end legislation to ease Congress' chronic budget brinkmanship and soften across-the-board spending cuts moved to the cusp of final passage Tuesday, a rare display of Senate bipartisanship that masked strong Republican complaints about slicing into military retirement benefits.

The measure is expected to clear the Senate and go to President Obama for his signature on Wednesday, marking a modest accomplishment at the end of a year punctuated by a partial government shutdown, a near-default by the U.S. Treasury and congressional gridlock on issues ranging from immigration to gun control.

"This bipartisan bill takes the first steps toward rebuilding our broken budget process. And, hopefully, toward rebuilding our broken Congress," said Sen. Patty Murray (D., Wash.), who negotiated the compromise with Rep. Paul Ryan (R., Wis.). The first major test of that is likely to come in February, when Congress faces a vote to raise the government's debt limit.

Tuesday's vote to send the measure toward final approval was 67-33. Among Philadelphia-area senators, Pat Toomey (R., Pa.) was the only "no" vote.

Even as the bill was advancing, Republicans vowed that the requirement for curtailing the growth in cost-of-living benefits for military retirees under age 62 wouldn't long survive.

The Democratic chairman of the Senate Armed Services Committee, Sen. Carl Levin of Michigan, has said the panel will review the change, estimated to trim $6.3 billion in benefits, early next year.

"This provision is absolutely wrong; it singles out our military retirees," protested Sen. Kelly Ayotte (R., N.H.) at a news conference shortly before the vote.

By late afternoon, the bipartisanship had faded as Republicans ratcheted up their criticism and maneuvered for political gain. A proposal aimed at removing the retirement provision failed on a near party-line vote of 46-54. Democratic Sen. Kay Hagan of North Carolina, who faces a difficult challenge for reelection, was the only senator to switch sides.

"How could any commander in chief sign a bill that does this?" asked Sen. Lindsey Graham (R., S.C.), who faces a primary challenge back home in 2014. He did not mention that the legislation drew overwhelming support from House Republicans only last week, including Speaker John A. Boehner (R., Ohio) and the rest of the leadership.

The provision related to military retirement was a relatively small part of legislation that itself was born of less-than-lofty ambitions.

Rather than reaching for a so-called grand bargain to reduce long-term deficits, lawmakers decided to reduce across-the-board cuts already scheduled to take effect, restoring about $63 billion over two years. The legislation includes a projected $85 billion in savings elsewhere in the budget.

The key details of the budget plan, which sets spending limits for two years and averts a possible government shutdown in January:

Establishes overall non-war-related discretionary spending at $1.012 trillion for the current fiscal year and $1.014 trillion for fiscal 2015. Discretionary spending is the money approved by Congress each year for agency operations. The House budget level had been $967 billion and the Senate $1.058 trillion for the year that runs through next Sept. 30. Fiscal 2013 spending was $986 billion.

Eases across-the-board "sequester" spending cuts by $63 billion over two years, split between defense and domestic programs. In the current fiscal year, defense would be set at a base budget of $520.5 billion and domestic programs at $491.8 billion.

Raises airline security fees from $5 to $11.20 for a typical round-trip ticket starting July 1, 2014. That would raise $13 billion over 10 years.

Reduces retirement benefits for working-age military retirees, including those who retire early because of disability. Starting Dec. 1, 2015, the cost-of-living adjustment for pensions received by people under 62 would be modified to equal inflation minus 1 percent. Upon reaching 62, retirees would receive a "catch-up" increase that would restore their pensions to levels as if the cost-of-living adjustment had been the full consumer price index in all previous years. The change would save $6 billion.

Increases by 1.3 percentage points the pension contributions paid by federal civilian workers hired after Jan. 1, 2014. The change would raise $6 billion.

Restricts access to Social Security death records to prevent identity thieves from filing fraudulent tax returns. The change would save $269 million.

Raises premiums paid by corporations to the Pension Benefit Guarantee Corp. to guarantee pension benefits, a change that would raise $8 billion.

Eliminates a requirement that the Maritime Administration reimburse other federal agencies for additional costs associated with shipping food aid on U.S. ships. This would save $731 million.

Cancels $1.6 billion in unobligated balances in Justice and Treasury Department funds that seize assets from criminals.

Caps the maximum government payment for contract employees at $487,000, indexed to inflation. Agencies could make exceptions for scientists, engineers, and other specialists.

Gives the Treasury Department greater access to prison data to prevent prisoners from claiming improper payments. This would save $80 million.

Approves a U.S.-Mexico agreement on oil and gas exploration in waters outside their exclusive economic zones.

- APEndText