Senate budget bill extends federal pay freeze through 2013

Tuesday - 3/12/2013, 5:49am EDT

By ANDREW TAYLOR
Associated Press

WASHINGTON (AP) -- Top Senate Democrats and Republicans Monday night released a catchall government funding bill that denies President Barack Obama new money for implementing signature first-term accomplishments like new regulations on Wall Street and his expansion of government health care subsidies but provides modest additional funding for domestic priorities like health research and highway projects.

Sec. 1112 of the Senate bill "continues the prohibition of automatic statutory pay increases," meaning the federal pay freeze would be extended through the end of 2013. The funding bill passed by the House last week included the same pay freeze extension, making it unlikely federal employees will see any type of raise for the third straight year. President Barack Obama had proposed a 0.5 percent increase for feds in 2013, to begin when the continuing resolution expired March 27.

"Federal employees now will have suffered three years of no pay raises, at the same time hundreds of thousands of them are facing multiple days of furloughs because of sequestration," said J. David Cox, national president of the American Federation of Government Employees. "It's hard to imagine the federal government becoming a less attractive employer than it is today after this decision."

Monday's measure is the product of bipartisan negotiations and is the legislative vehicle to fund the day-to-day operations of government through Sept. 30 -- and prevent a government shutdown when current funding runs out March 27.

It sets a path for government in the wake of across-the-board sequestration spending cuts that took effect March 1. In most cases the minor changes in agency budgets amount to housekeeping within a trillion-dollar cap for the day-to-day operations of agencies in the current budget year.

Passage in the Senate this week seems routine and could presage an end to a mostly overlooked battle between House Republicans and Obama and his Senate Democratic allies over the annual spending bills required to fund federal agency operations.

The measure expands upon House GOP legislation that passed last week, adding sometimes symbolic funding and flexibility for scores of programs, and challenges House Speaker John Boehner, R-Ohio, who warned Democrats last week not to load the measure up too much.

But each of the additional items was drawn from earlier informal House-Senate agreements, and top Senate Appropriations Committee Republican Richard Shelby of Alabama has signed on.

The White House voiced its support for the Senate bill as well.

"The substitute amendment improves upon H.R. 933 by strengthening funding for transportation infrastructure, manufacturing, research and development, early childhood programs, and housing programs," the White House said in a statement. "Further, the administration strongly supports inclusion of several full-year appropriations bills, which will improve the ability to efficiently allocate funding to key investments, including those that support science and innovation, nutrition, cybersecurity, community safety, and national defense."

The bipartisan measure comes as Washington girds for weeks of warfare over the budget for next year and beyond as both House and Senate Budget Committees this week take up blueprints for the upcoming 2014 budget year.

The first salvo in that battle is coming from House Republicans, who released on Tuesday a now-familiar budget featuring gestures to block "Obamacare," turn Medicare into a voucher-like program for future retirees and sharply curb Medicaid and domestic agency budgets. Such ideas are dead on arrival with Obama and Democrats controlling the Senate, but will -- in concert with new taxes on the wealthy enacted in January -- allow Republicans to propose a budget that would come to balance within 10 years.

"We think we owe the American people a balanced budget," House Budget Committee Chairman Paul Ryan said on "Fox News Sunday."

Senate Democrats are countering on Wednesday with a budget plan mixing tax increases, cuts to the Pentagon and relatively modest cuts to domestic programs. The measure would not reach balance, but it would undo automatic budget cuts that started taking effect this month and largely leaves alone rapidly growing benefit programs like Medicare.

"We need to make sure that everybody participates in getting us to a budget that deals with our debt and our deficit responsibly," Budget Committee Chairwoman Patty Murray, D-Wash., said Monday evening.

The upcoming debate over the long-term budgetary future promises to be stoutly partisan, even as Obama is undertaking outreach to rank-and-file Republicans in hopes of sowing the seeds for a bipartisan "grand bargain" on the budget this year after two failed attempts to strike agreement with House Speaker John Boehner. Obama's budget is already weeks overdue and Press Secretary Jay Carney deflected questions about it Monday, other than to promise that it would "for a period of time" bring deficits below 3 percent of gross domestic product, a measure that many analysts say is sustainable without damaging the economy.