A Budget Deal Agreement Has Been Reached

In what seems like an impossibility, Congress seems to have come to an bipartisan agreement on the budget.

It still needs to pass through both Chambers of Congress but this is definitely progress.

Some of the points addressed in this budget:

• Agreement is for 2014 and 2015 meaning that if passed we can actually have 2 full years without a threat of a government shutdown.  This is something which is unheard of in today's era of severe partisanship but a much needed boost of confidence for the economy and small businesses who crave for some stability in Washington.
• Sequestration cuts would be eroded as military and domestic spending would rise to $1.012 trillion in 2014 and $1.014 in 2015.  This would occur without affecting areas like health research, education, and Head Start.

To pay for it:

• An increase to airline fees used for airport security.
• Part of the sequester which cuts 2% from Medicare payments to health providers from 2012-2021 has been extended by 2 years to 2023.
• Higher contributions by government employees to their pensions.
• Military pensions would see slower cost of living adjustments.
• Private companies would pay more into the federal Pension Benefit Guaranty Corporation.

Total savings

• Net savings would total $23 billion.

Already we are having the extreme right wing go nuts with this budget.  Sequestration is doing just fine in their eyes.

Let's see if this budget is approved.

If this is passed could it mean the Fed will feel much more comfortable with tapering?

Info from wsj and nyt