The Bipartisan Budget Act of 2013 would set overall discretionary spending for the current fiscal year at $1.012 trillion—about halfway between the Senate budget level of $1.058 trillion and the House budget level of $967 billion. The agreement would provide $63 billion in sequester relief over two years, split evenly between defense and non-defense programs. In fiscal year 2014, defense discretionary spending would be set at $520.5 billion, and non-defense discretionary spending would be set at $491.8 billion.
Key Savings/Deficit Reduction Provisions Under the Budget Agreement
Not For Profit Student Loan Servicer Program: In 2010 Congress created a provision to allow non-profits and state agency lenders to service federal Direct Loans. Under the budget agreement, the amount these services may charge borrowers for rehabilitating defaulted loans is reduced. Also, non-profit loan servicers will be paid with the same discretionary funds as the private companies that currently service the Department of Education's direct loans. This is expected to result in a $3.1 billion savings.
Aviation Security Fees: An increase in the aviation security fee would essentially cover more of the costs associated with the government's security screening procedures. Currently, airline passengers pay $2.50 per one way flight to cover security fees. Under the agreement, this fee would increase to $5.60 per one way flight, effective July 1, 2014.
Retirement Benefits for Military Retirees: A modest adjustment to military retirement benefits for younger retirees (who often take on a second career after leaving the military) results in a lower annual cost of living adjustment, minus one percentage point starting in December 2015 until the person reaches age 62. This change is expected to reduce the deficit by $7 billion over the next ten years.
The House passed the budget deal on December 12, 2013 in a bipartisan 332-94 vote. The Senate will take up the bill on Tuesday, December 17, 2013. Once both chambers approve the budget agreement much work will need to be done in January. Senator Barbara Mikulski, Chair of the Senate Appropriations Committee and Representative Hal Rogers, Chair of the Full House Appropriations Committee will work to determine the allocations of funding that will be made available for each appropriations subcommittee.
Given that Congress will have less than two weeks to complete the FY 2014 spending process (remember the continuing resolution expires on January 15, 2013) after the holidays, it is highly likely that Congress will approve an omnibus spending bill (roll all the spending bills in one package). All of this is yet to be determined because consensus will need to reached on the 12 spending bills.
Below are links to summaries and other related documents on the Budget Agreement: