Tuesday evening, Budget Conference Committee Chairs Senator Patty Murray (D-WA) and Congressman Paul Ryan (R-WA) unveiled an $85 billion budget agreement that sets spending levels for the remainder of Fiscal Year (FY) 2014 and FY 2015, while cutting the deficit by $23 billion.
The agreement reduces the sequestration cuts by $63 billion, and provides a FY 2014 discretionary spending limit of $1.012 billion. In FY 2015, discretionary spending would rise to $1.014 billion. With the $63 billion in sequestration relief, $491.8 billion would be provided for nondefense discretionary spending – the segment of the budget from which the Department of Transportation and the Federal Transit Administration (FTA) are funded. That is up from the current full-year, post sequestration, amount of $450.3 billion
The budget agreement does not raise taxes, but it does raise revenue in the form of fees. The Transportation Security Administration’s 9/11 fee – a per airline passenger assessment – would rise to $5.60, is estimated to raise $12.6 billion and will be used to fully offset the cost of the sequestration relief. The agreement also provides savings in the form of mandatory savings and nontax revenues, such as increased premiums for new federal employee contributions to pensions, reduced payments to student-loan debt collectors and cost savings from not completely refilling the strategic petroleum reserves.
For public transportation, the increase in nondefense discretionary spending should give authorizers and appropriators breathing room to provide funding for the FTA’s General Fund programs. However, it does not address the looming revenue shortfall in the Highway Trust Fund. Legislators will still need to separately find a solution to fully funding the HTF.