The Bipartisan Budget Act of 2013 became law Dec. 26. The agreement funded the government for 2014 and 2015 and prevented another government shutdown. It provided relief from the most damaging of the sequestration wounds inflicted on government agencies – in particular the Defense Department.
The agreement also showed that Republicans and Democrats in Congress can work together to solve problems. It was a necessary compromise.
BUT THE AGREEMENT did almost nothing to reduce the federal debt. The law will reduce debt by $23 billion over the next 10 years. But according to the Congressional Budget Office, the federal debt will increase by $6.3 trillion.
Do the math. For every $6,300 in new debt there is $23 in debt reduction. This negligible impact is because of Budget Conference Committee Co-Chairman Republican Rep. Paul Ryan’s not allowing revenue increases in the agreement. Co-Chairwoman Democratic Sen. Patty Murray refused to reduce entitlement programs.
With revenues and entitlements off the table, hopes for a ‘“grand bargain” disappeared. The objective became funding the government to avoid a shutdown and to alleviate sequestration damage.
An agreement that met those objectives deserved approval. The co-chairs agreed it was far from perfect, but there was neither time nor political will to make it better.
This is what compromise looks like. No one gets all they want, but the government can function.
Georgia Sens. Saxby Chambliss and Johnny Isakson were right to vote for the agreement. Democratic Rep. John Barrow also properly voted for the bill. Georgia Republican House Reps. Jack Kingston, Paul Broun and Phil Gingrey all voted against the agreement. They are competing to replace the retiring Sen. Chambliss, and none wanted to give any of the others ammunition for attack from the uncompromising far right.
WHILE THE COMPROMISE was necessary, it is illuminating to see where budget negotiators cut spending to offset the cost of sequester relief. Two parts of the act are particularly revealing.
Federal civilian employees hired after Jan. 1, 2014 will contribute 4.4 percent of their salary to their pension plans. This is more than five times the contribution for civilian employees hired before Jan. 1, 2013.
Current and future military retirees younger than age 62 will have their cost-of-living increases reduced by 1 percent annually. Older military retirees such as myself will not be affected.
So in the convoluted logic of hyper-partisan politics, new and younger federal employees and working-age military retirees will be penalized, while hedge fund managers, Social Security beneficiaries and most Americans will be untouched. South Carolina Sen. Lindsey Graham said, “Is the choice between keeping the government open and screwing all the military retirees? Is that the right choice?”
IT IS NOT THE right choice, and it is likely that the Congress will change the military provision before it goes into effect. But this has become the reflexive strategy of Congress. Go after the politically weak such as the military and the young, and keep hands off the politically strong, the wealthy and seniors.
A solution that actually will reduce the deficit – and with more fairness – is to reduce the cost of living increases on all federal retirement payments. This includes military, federal civilians and Social Security beneficiaries. In the past in my column, I have proposed such a solution by adopting the chained Consumer Price Index to calculate COLA increases. But this would have an impact on all seniors, and Congress will not confront them.
The new budget agreement is only the latest example of Congress showing its preference for burdening younger citizens with escalating costs and potential Social Security tax increases, while simultaneously saddling them with exploding debt.
It is startling that working-age members of both political parties do not protest their own party voting against their long-term financial interests. Without political engagement, they will continue to be cannon fodder for politicians.
(The writer is a retired U.S. Navy officer. He lives and writes in Savannah.)