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National News

November 25, 2013

Prospects brighten for small-scale budget deal

(Continued)

The automatic cuts known as sequestration require $109 billion in spending cuts every year through fiscal 2021 compared with limits set by the 2011 deal. About $90 billion of those cuts would come from agency budgets set by annual spending bills; the rest comes from cuts to a handful of so-called mandatory programs, including a 2 percent cut in Medicare reimbursements to health care providers. Those Medicare cuts are likely to remain in place.

Ryan and Murray appear to be focusing on proposals left over from Murray’s days as co-chairman of the failed 2011 deficit “supercommittee” and earlier efforts by Vice President Joe Biden. Those measures include requiring federal workers to contribute more for their pensions, new security fees on air travel, and higher premiums on companies whose pension plans are insured by the government.

Republicans are holding firm against using money from closing tax loopholes as part of the agreement. New tax revenue from closing loopholes should instead be used to lower tax rates, they say.

Democrats have taken curbs in Social Security cost-of-living increases and higher Medicare premiums on upper-income beneficiaries off the table. Instead, Democrats want to claim savings from repealing much-criticized direct payments that the government makes to farmers whether or not they plant a crop. House Speaker John Boehner, R-Ohio, objects to including any savings from ending that farm subsidy as part of the budget deal.

Ryan has told other Republicans that he thinks Murray will relent on taxes. She’ll likely want something in return. Democrats, for instance, have mounted a holiday season campaign to spend $25 billion extend jobless benefits averaging less than $300 a month to the long-term unemployed. Benefits for 1.3 million people expire at the end of December. Those long-term jobless benefits once added up to 73 weeks in federal benefits to the 26 weeks of state benefits for a maximum of 99 weeks. Now, 73 weeks is the maximum allowed, with the nationwide average of 54 weeks.

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