President Obama formally signed a two-year budget agreement Monday that heads off potential showdowns with Republicans over the debt ceiling and government shutdowns for the remainder of his presidency.
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Tuesday was the deadline by which the USA would have defaulted on its financial obligations without an agreement.
The deal emerged a week ago after weeks of secret negotiations between congressional leaders from the House and Senate and senior Obama administration officials. Rather than a spending increase of $80 billion over two years, the nonprofit group said, the actual spending hike is $154 billion when interest costs and budget gimmicks are factored into the equation.
The bill, finally approved by the Congress last week, would extend the government’s borrowing authority through March 2017, when a new Congress and new president are in place. Through this, the appropriations committee has until 11 December to craft legislation reflecting the spending priorities set in the new bill. Republican Rep. John Boehner of Ohio, who stepped down both as speaker and from his seat in Congress at the end of last week, said he felt a sense of urgency to reach a deal before turning the gavel over to Ryan. Other lawmakers wanted the issue taken off the table as they look ahead to next fall’s elections.
“They’re going to have to come up with spending bills”, he said.
To pay for the $80 billion in extra spending, the agreement finds savings in a range of areas.
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The deal limits a 52 percent premium increase that would have hit 8 million beneficiaries of Medicare Part B next year. A prime reason that Mr. Boehner left office was conservatives’ displeasure with his accommodation of the president’s budget requests, aside from three years of “sequestration” spending caps that helped limit annual deficits. With the increase evenly split, the fiscal 2016 defense cap will rise to $548.1 billion while the nondefense cap will go up to $518.5 billion. There’s also a drawdown from the Strategic Petroleum Reserve, and savings reaped from a Justice Department fund for crime victims that involves assets seized from criminals.
