U.S. budget negotiators have reached agreement on a deal that includes raising the contributions that federal employees make to their retirement plans and increasing premiums for pensions backed by the Pension Benefit Guaranty Corp., congressional aides said.
The deal also would ease automatic federal spending cuts by about $60 billion over two years and reduce the deficit by $20 billion.
The compromise, worked out between chief negotiators Sen. Patty Murray and Rep. Paul Ryan, would set spending at about $1 trillion in 2014, higher than the $967 billion required in a 2011 budget accord, according to an aide close to the talks who requested anonymity to discuss the deal.
The toughest part might be selling it to Congress, where skepticism is emerging in both political parties.
It's “a deal that not everbody's going to like,” said Maine Sen. Angus King, an independent who sits on a 29-member panel led by Mr. Ryan of Wisconsin and Ms. Murray of Washington.
The tentative accord would relieve the automatic spending cuts known as sequestration by $40 billion in 2014 and about $20 billion in 2015, the aide said.
“A very important message here is showing the American people that we are capable of putting aside partisan differences and actually acting and passing a budget for the first time in four years,” Mr. King said. “It will restore some confidence, it will help the economy.”
The deal is already being criticized by Republicans who don't trust proposals for future savings and from Democrats who say it will punish federal workers.
At least 30 House Republicans oppose any deal that trades the scheduled spending cuts for future savings that might fail to materialize. House Democrats are fighting proposals to increase employee contributions to their pension plans, a pillar of the emerging compromise.
Democrats who will be in charge of rounding up votes to pass a budget plan include Rep. Steny Hoyer, the No. 2 Democrat in the House and Rep. Chris Van Hollen, who are from Maryland districts that are home to many federal workers who oppose the pension provision. This was included as President Barack Obama proposed a $20 billion cut to pension costs in his budget blueprint.
The potential deal also faces peril from Republicans.
A letter signed by 30 lawmakers including Rep. Mick Mulvaney, a South Carolina Republican, and sent to House leaders criticized the negotiators' emphasis on pushing off cuts to future years. The letter echoes concerns of many Senate Republicans, said an aide close to the discussions who requested anonymity.
