After a year of a do-nothing Congress, the House managed to convincingly push through a budget bill.
The bill had a surprising amount of bipartisan support and passed with a vote of 332-94. It was, however, rumored to be hard-fought and required quite a bit of negotiation. Leading the way were Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA), raising the chatter about where leadership is headed for both parties.
While House Democratic Leader Nancy Pelosi (D-CA) is likely relieved that the Congress managed to find some common ground, she was, however, clearly disappointed that the bill didn’t extend unemployment benefits, a fairly controversial proposal.
For his part, House Speaker John Boehner (R-OH) also urged House Republicans forward, avoiding a repeat of the earlier government shutdown. The Republicans – including Rep. Boehner – took a black eye after the shutdown, as many taxpayers blamed the GOP for taking and then abandoning a win-nothing stance.
The bill isn’t a complete panacea. Many of the key issues (like immigration) were shelved and other budget items were merely extended temporarily. The controversial farm bill is extended for one more month so that Congress can hammer out the details. And Congress continued its game of Kick the Can by pushing off the planned cuts in Medicare reimbursements to doctors by three months, bringing the extensions on that measure to ten years (the actual law was passed in 1997).
The bill doesn’t parse out line by line budget items but rather sets spending targets. Under the bill, spending is actually up: it’s now $1.012 trillion, as opposed to $986 billion in 2013. To make up the difference, taxpayers will dig deeper for new “user fees.” Nobody wants to call them taxes – fees sounds so much better, don’t you think?
Here’s the official explanation from the House:
People can decide whether to use a specific government good or service. In those cases, they agree to pay a fee to receive the benefit. If they do not use the benefit, they do not pay the fee.
Taxes, on the other hand, must be paid regardless of whether the taxpayer wants the services that those taxes fund. CBO defines taxes as “funds collected from the public that arise from the government’s exercise of its sovereign or governmental powers.”
So there you go.
(Psst: you can still call it a tax if you want.)
Included in those fees: a hike in the passenger security fee for air travel. Currently, the cost is $2.50 per trip leg – and per trip leg includes each piece of a layover or stop – with a total cap of $5. In 2014, that fee will increase to $5.60 for each trip to and from your destination. Doing the math, that means that folks who fly direct will see a significant boost ($11.20 for roundtrip travel as opposed to $5) but travelers making stops will see a smaller increase. All of those dollars and cents will add up: the increase is expected to raise $13.4 billion over the next ten years.
Also on tap are increases to immigration and customs fees. The customs user fee will increase by $2 to $7.50 and the immigration user fee is bumped by $2 to $9. The budget would further allow the U.S. Customs and Border Protection to adjust the immigration and customs user fees annually for inflation.
And it doesn’t stop there. There are billions of dollars of increased administrative fees. The total? At least $85 billion. In fact, the word “fee” appears 32 times in the text of the bill.
One industry got its way: the budget includes language that makes it easier to repeal the controversial medical device tax. It’s not a repeal. It just makes repeal easier. Baby steps for the medical device industry. The tax remains in place for now.
Other industries – including the federal government – took a hit. New hires for the federal government will have to contribute more to their pension fund. The result is basically a cut in pay to the tune of 1.3%. Cost-of-living-adjustments (COLA) will also be trimmed for military retirees under the age of 62.
Contractor salaries will also decrease in theory since the deal limits what the government will pay.
And my favorite provision in the deal? The Death Master File will now be restricted to authorized users. Big penalties ($1,000 for each misuse) are in place for those that break the rule.
The combination of increased spending and fees is making some Senate Republicans uneasy. Only 51 votes are needed to pass the deal in the Senate but that’s assuming it makes it to a vote. Some Republicans have vowed to filibuster the bill: if that happens, Democrats will need at least five Republicans on their side to move it to a vote. Some of the more senior Senators, like Sen. Susan Collins (R-ME) and Sen. John McCain (R-AZ), have indicated initial support but some big names are still saying no. Those include Sen. Jeff Sessions (R-AL), Sen. Kelly Ayotte (R-NH), Sen. Rand Paul (R-KY), Sen. Pat Toomey (R-PA) and not surprisingly, Sen. Ted Cruz (R-TX).
Passage in the Senate means we won’t face another government shutdown any time soon. Without it, we run out of money on January 15.
