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December 11, 2013 9:58 AM The Budget Deal

By Ed Kilgore

As has been expected since the weekend, Patty Murray and Paul Ryan have come up with a budget deal that bipartisan congressional leaders (and the White House) will now try to rush through Congress before it adjourns for the year.

It’s an actual deal that is designed to run for two fiscal years, not just another stopgap measure. It easily meets the deadline set out in the agreement that ended the recent government shutdown, and presumably will also make the next debt limit increase a bit easier to secure. That’s good not only for those who like their politics and governing lukewarm, but probably good also for the economy as a whole.

Relief from the appropriations sequester established in 2011 is the main beneficiary of the deal, with $45 billion in restored spending authorized for FY 2014 and $20 billion for FY 2015 (both divided evenly between defense and non-defense accounts). The non-defense restoration represents about two-thirds of the planned sequester, so it’s not peanuts.

Another $20 billion is burned up at the altar of the decaying Beltway idol of deficit reduction. And the total of $85 billion in “savings” in the deal comes mainly from significantly higher pension contributions by new federal employees and new fees on commercial air travel.

What’s excluded from the deal is pretty remarkable given past budget negotiations. All the “grand bargain” stuff—higher taxes on the wealthy, “reforms” to entitlements—was left out entirely. There were no symbolic nicks to Obamacare funding, best I can tell. And the deal left in place Medicare provider cuts that both health care lobbyists and many Republicans were screaming about.

Most importantly, the deal left out an extension of unemployment (UI) benefits for the million or so people who will run out of benefits—and out of luck—at year’s end. Individual pain aside, that will greatly undermine if not completely cancel the stimulative effect of the deal. It will also represent something of an official surrender by the federal government on unemployment, since the long-term unemployed are increasingly who we are talking about (short-term unemployment is now lower than it was in 2007).

The cost of another year of extended UI was estimated at about $25 billion—not much more than the symbolic money thrown at deficit reduction in the deal. That will bug a lot of congressional Democrats, as it should.

Still, the main political risk to the deal’s implementation comes from House Republicans. Heritage Action has already come out against it. RedState’s Erick Erickson is already denouncing it as another sell-out. Shrieking from the Right will increase each hour today.

If I were a congressional Democrat under orders to vote for this deal, I tell you what: I’d make sure to get as many of my colleagues as possible together on a public pledge to make measures aimed at reducing long-term unemployment my top priority in 2014, whether it’s via restoring benefits in a free-standing bill, or an intensive job placement assistance program, or direct federal hiring. The one thing we know for sure about long-term unemployment is that it tends to be self-perpetuating and socially corrosive, so there is no time to waste. Yes, Republicans will fight almost any relief effort, but they should at least be forced to go on record labeling one million of their fellow citizens as permanently disposable.

Ed Kilgore is a contributing writer to the Washington Monthly. He is managing editor for The Democratic Strategist and a senior fellow at the Progressive Policy Institute. Find him on Twitter: @ed_kilgore.

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