Budget Deal May Head Off Pay Freezes, Furloughs

Capitol in fog.

WASHINGTON -- A budget deal struck late Monday by Congress could avert a government shutdown this winter and protect troops and Defense Department civilians from pay freezes and furloughs.

Republicans and Democrats agreed to raise caps on federal spending for two years, though the new defense spending limit of $607 billion is $5 billion less than was requested for the coming year.

The agreement ends a fight with President Barack Obama that led to his veto last week of the 2016 National Defense Authorization Act, a bill that includes military pay and benefits as well as an historic overhaul of the 20-year retirement system.

"This is a good deal for our troops, for taxpayers and for the American people," outgoing House Speaker John Boehner, R-Ohio, said.

If Congress votes to pass the budget deal this week, lawmakers could re-tool the NDAA and send it back to Obama before the defense budget expires Dec. 11 and DoD paychecks are frozen as part of a shutdown.

The deal appeared likely to pass Congress but was still hitting some opposition from conservative House Republicans in the Freedom Caucus, a voting block of Tea Party lawmakers who oppose spending increases. Members recently forced Boehner into resigning at the end of this month and on Tuesday were pressuring his heir apparent, Rep. Paul Ryan, R-Wis., to reject the agreement.

Ryan slammed the process that led to the deal but stopped short of siding with the fiscal conservatives.

"I think this process stinks. This is not the way to do the people's business," he said ahead of his expected election as speaker Thursday.

Also, it was not immediately clear how lawmakers would reconcile the $5 billion cut to defense that is part of the deal.

Sen. John McCain, R-Ariz., chairman of the Armed Services Committee and architect of the NDAA, told other news outlets that they were uncertain were the reduction would be made but that it would not hold up the defense budget bill.

Rep. Mac Thornberry, R-Texas, chairman of the House Armed Services Committee, said he will support the deal though it provides less than Congress had planned for the military and sets another spending limit next year.

"Our military has been the target of repeated funding cuts, and it has been used by the President as a political bargaining chip. Our armed forces deserve to have some stability in their funding as they defend the nation in an increasingly dangerous world," he said in a released statement.

Earlier this month, Congress passed a $612-billion NDAA that called for overhauling 20-year military pensions into a blended system that also offers 401(k)-style contributions to service members when they join. The change would reduce the value of the pensions by 20 percent -- current service members would not be affected unless they opt in -- but would expand benefits to many who separate before the 20-year mark with no retirement benefits.

The bill also would increase Tricare co-pay amounts for certain prescription medicines, protect the A-10 Thunderbolt II from a planned Air Force retirement, and review the possession of personal firearms on military bases.

Obama vetoed the NDAA to force Republicans into raising spending caps called sequestration that were passed by Congress in 2011 as a way to reduce debt. The GOP had tried to circumvent the budget caps by funneling $38 billion into an overseas war fund that is exempt from the spending limits.

The Pentagon had opposed the move, contending the use of emergency war funding for daily defense needs makes long-term planning difficult.

On Tuesday, Army Chief of Staff Mark Milley said the potential two-year budget deal could give the service needed stability for planning out expenses such as training, weapons and spare parts.

"I would welcome anything that is steady, that is predictable and that we can plan against," he said.

-- Reporter John Vandiver contributed to this report.

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