Budget deal gives defense breathing room.

• Author: Farrell, Lawrence P. Jr.
• Position: President's Perspective

The budget agreement that Rep. Paul Ryan, R-Wis., and Sen. Patty Murray, D-Wash., announced Dec. 10 called for delaying a portion of sequester for two years and proposed $85 billion in "light touch" savings over 10 years.

Ryan and Murray are the co-chairs of the 29-member congressional conference panel that was assigned the task of finding savings to offset 2014 and 2015 sequester hits for discretionary accounts. The spending bill, known as the Bipartisan Budget Act of 2013, passed the House of Representatives and was approved by the Senate.

The outlines of the agreement, only minutes after they were released, began receiving vigorous protests from the fiscal conservative side. And although the most strident objections are coming from the right, the left-leaning caucus is not happy, either. It is a deal not likely to make anyone totally happy, so that must mean it has a chance of succeeding.

There are two central issues here. One is what went into the deal. The second is what it means for defense.

The agreement was achieved through a combination of waste reduction, elimination of special carve-outs 5 for some corporations, (P modifications to federal retirement programs--both civilian and military--increases 8 in airline fees, pension insurance premiums and an extension of 4 sequester for manda- 2 tory spending for an additional two fiscal years--2022 and so 2023. This last provision garners an additional savings of $28 billion.

The agreement specifies that $22 billion of the $85 billion goes to deficit reduction. This leaves $63 billion to be shared between defense and non-defense discretionary spending for fiscal years 2014 and 2015, to reduce a portion of the sequester cuts scheduled to be effective in those two years.

So it is not an increase in spending, but a reduction in the cuts scheduled under the Budget Control Act and the sequester trigger. For example, the Budget Control Act specifies the discretionary total for fiscal year 2014 to be $967 billion ($498 billion for defense, $469 billion for non-defense). The agreement reduces sequester for each account by $22.5 billion, raising defense to $520.5 billion and non-defense to $491.8 billion for fiscal year 2014. In fiscal year 2015, the Budget Control Act total was $995 billion ($512 billion for defense, $483 billion for non-defense).

In fiscal year 2015, the agreement reduces sequester by $9 billion for each account, raising defense to $521.4 billion, and nondefense to $491.8...