Associations Have Mixed Reactions to Bipartisan Budget Deal

The Bipartisan Budget Act of 2013, a deal worked out between the heads of the House and Senate Budget committees, restores much of the funding cut under sequestration, but a number of associations say that pain points definitely still exist.

A bipartisan budget deal announced Tuesday by the heads of the House and Senate budget committees restores much of the funding cut under sequestration. But several associations say the deal introduces some new pain points.

It’s a deal that many associations have been waiting for, but that doesn’t mean that it’s all good news.

This is not a deal federal employees are happy with, but it may be one they are forced to accept.

The Bipartisan Budget Act of 2013, a deal worked out by the Budget Conference Committee headed by Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI), would restore $63 billion of the automatic spending cuts made under sequestration. While the bill would fund the government through February 2015 and roll back some major cuts without raising taxes, the spending would be paid for in other ways, leading a number of interests and their organizations to speak out. Those include:

Federal workers: One notable element of the budget deal is an agreement that newly hired federal employees would pay a higher percentage of their salary toward their retirement benefits each year than current ones do—a change projected to save the government $6 billion over 10 years. The deal comes with silver lining for existing federal workers: Those hired before 2013 will continue to pay 0.8 percent of their salary toward their pensions; those hired in 2013 will contribute 3.1 percent of their salary to their retirement fund. New workers would pay an extra 1.3 percent, for a total of 4.4 percent overall. But both the National Active and Retired Federal Employees Association (NAFRE) and the National Treasury Employees Union (NTEU) expressed concerns about further squeezing federal workers for budget savings. “This is not a deal federal employees are happy with, but it may be one they are forced to accept,” NAFRE said in a statement.

Hospitals: One of the biggest cuts involves payments to Medicare providers. According to a summary, the deal proposes to save $28 billion over 10 years “by requiring the president to sequester the same percentage of mandatory budgetary resources in 2022 and 2023 as will be sequestered in 2021 under current law [the 2011 Budget Control Act].” “Mandatory budget resources” largely means Medicare, and the dates specified mean providers’ payments would take a hit for two more years beyond the 10-year sequestration period. The Huffington Post reported that congressional staffers said Medicare providers were considered “the least-painful target” for the cuts. But the Federation of American Hospitals, which represents investor-owned hospitals, saw it differently: “America’s hospitals have grave concerns about the Murray-Ryan proposed budget agreement and urge members of Congress to oppose it,” association President Chip Kahn said in a statement. [PDF]. “The budget agreement threatens access to critical healthcare services for seniors by trading off Medicare cuts for increases in government and defense spending today.”

Airlines: While airline groups have been looking forward to an expansion of the Transportation Security Administration’s security pre-approval program, they’re not ready for an increase in the passenger fee used to fund the TSA. The so-called September 11 fee is currently $2.50 for a nonstop one-way trip and $5 for those with connecting flights; the budget plan would raise that to $5 for all one-way trips. Groups such as Airlines for America and the National Association of Airline Passengers object to the fee hike, with the latter group’s Douglas Kidd telling The Wall Street Journal: “We don’t like the tax as it is, so we certainly don’t want to see it increased.”

Higher education: Groups related to education and the sciences have expressed concern that sequestration was hurting the country’s research infrastructure, and the budget plan takes much of the pressure off. That led to early praise from some groups, according to Inside Higher Ed. Peter McPherson, president of the Association of Public and Land-Grant Universities called the deal “an important first step toward ending the reckless and blunt cuts” caused by sequestration. Committee for Education Funding Executive Director Joel Packer said that his group is “generally pleased,” though the deal wasn’t everything its members had hoped for. However, the budget deal specifically calls out one element of the higher education puzzle as an issue—the “special treatment” of nonprofit student-loan servicers, which Ryan said in a fact sheet [PDF] would save the government $3 billion. The National Council of Higher Education Loan Resources described changes related to student-loan servicing as “very troubling.”

(Ingram Publishing/Thinkstock)

Ernie Smith

By Ernie Smith

Ernie Smith is a former senior editor for Associations Now. MORE

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