US Senate passes compromise budget deal

18 December 2013 23:01  [Source: ICIS news]

WASHINGTON (ICIS)--The US Senate on Wednesday gave final congressional approval to a two-year federal budget plan that will maintain government operations through fiscal year 2015 and likely avoid further shutdowns during that period.

The Senate voted 64-36 to approve the compromise budget deal that was passed last week by the House with a strong bipartisan vote of 332-94.

The budget deal, crafted by House Budget Committee Chairman Paul Ryan (Republican-Wisconsin) and Senate Budget Committee Chairwoman Patty Murray (Democrat-Washington) raises federal spending for the current 2014 fiscal year to $1,012bn (€738.8bn) from the just-ended 2013 fiscal year total of $967bn.

For fiscal year 2015, the budget proposal would raise federal spending slightly higher to $1,013.6bn.

Although opposed by many Republicans in both the House and Senate because it does raise spending, the bill won bipartisan approval in both chambers as other Republicans, wary of another government shutdown like the one that plagued Washington 1-16 October, joined Democrats in final votes.

President Barack Obama is expected to sign the measure on Thursday if not before.

With passage of the budget by the Senate and House, Congress has avoided another possible fiscal showdown that otherwise could have developed by 15 January when the existing temporary budget extension was due to expire.

The budget bill restores some $63bn of the approximate $800bn cut from the federal budget last fiscal year by the sequestration, but it offsets that spending, said Ryan, with “mandatory savings and non-tax revenue totalling approximately $85bn”.

Ryan said that while the plan does not raise income taxes, it does increase certain fees and eliminates some minor federal outlays over the next two years. 

For example, it reduces the interest rate paid by the federal government to energy companies on the amounts they overpay for oil and gas royalties, saving $750m over 10 years.

In another example, the compromise would raise airline passenger fees from $2 to $5.60 per flight to help support the Transportation Security Administration (TSA).

Although the proposal raises federal spending levels for the current fiscal year and for fiscal year 2015, Ryan said the measure would save $28bn over 10 years.

While passage of the compromise budget avoids what otherwise could have been a fiscal crisis on 15 January, there is another potential federal government spending confrontation between the White House and Senate Democrats on one side and the Republican majority House on the other.

That confrontation could emerge in early March when the federal government is expected to exceed its congressionally authorised debt limit.

Unless Congress authorises an increase in the amount of money that the government may borrow on financial markets to cover underfunded spending programmes, the White House again would be obliged to start shutting down operations.

The US government spends about $10bn each day, but it has revenues of only around $6bn daily and consequently must borrow money - by selling Treasury bonds - to cover the $4bn balance in outlays.

The current US national debt exceeds $17,000bn, slightly higher than US annual gross domestic product (GDP) of around $16,900bn.

Republicans may use the debt ceiling deadline to press the White House and Senate for cuts in some spending programmes.

($1 = €0.73)

Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy


By: Joe Kamalick
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index