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Republicans Back Federal Budget Deal; Deficits To Rise

Associated Press

WASHINGTON (AP) — The Republican-dominated House of Representatives was expected to pass a compromise spending plan designed to prevent a repeat of October's costly government shutdown and ease automatic budget cuts that would otherwise deplete the Pentagon and domestic agencies for another year.

The bipartisan measure's expected passage Thursday would be seen as crack in the wall of partisan gridlock that has gripped Congress through much of President Barack Obama's nearly five years in the White House.

As the House prepared to vote, Obama and many Democrats who control the Senate praising the budget deal negotiated over several months by House Budget Committee Chairman Paul Ryan, Republican presidential nominee Mitt Romney's running mate in 2012, and Democrat Senate Budget Committee Chairwoman Patty Murray.

The modest deal would continue federal deficit spending, upsetting small-government, low-tax tea party Republicans. Democrats, meanwhile, remained unhappy that the spending plan fails to extend jobless benefits for the long-term unemployed. The cutoff for those benefits would hit Dec. 28 in the midst of the Christmas-New Year holiday season.

Ryan said Thursday that the spending deal moved a divided government "in the right direction" and was possible because he and Murray decided not to move into areas that are held as core beliefs by Republicans and Democrats.

The plan does not specifically raise taxes, an anathema to Republicans, but does raise money through increased government fees. It does not touch entitlement programs dear to Democrats, including spending on Medicaid medical insurance coverage for older Americans and the Social Security pension system that kicks in at retirement age.

The deal does preserve much of the sharp, crude spending cuts the Republicans won in a 2011 showdown with Obama. And it greatly reduces the chances of a rerun of the politically debilitating partial government shutdown that the Republicans stumbled into in two months ago.

At the same time, the spending plan would prevent a second and third year of politically risky cuts to military readiness and weapons, as well as continued cuts to parts of the government cherished by Democrats and Republicans alike, including health research, school aid, FBI salaries and border security.

The cuts would be replaced with money from — among other things — higher airline security fees, curbs on the pension benefits of new federal workers or working-age military retirees, and premium increases on companies whose pension plans are insured by the federal government.

The pact would ease $63 billion in scheduled spending cuts over the next two years and replace them with longer-term savings measured over 10 years, many of which won't accumulate until 2022-23. Deficits would increase by $23.2 billion in 2014 and by $18.2 billion the year after that.

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In appearances on morning TV news shows, Ryan said the deal was necessary to help put the economy on a firmer footing at a time when the Federal Reserve Board apparently is set to wind down its bond-buying stimulus program, which has kept interest rates at or near record lows.

Ryan called it a start toward fiscal responsibility, while acknowledging that "I don't see any difference in the likelihood of a grand bargain" for the long term on taxes and spending.

Two of Ryan's potential rivals if he seeks the Republican presidential nomination in 2016 — Senators Rand Paul and Marco Rubio — oppose the measure.

Copyright: Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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