Politics : Senate Poised to Vote on Budget Plan

In a move that aims to avoid the threat of government shutdown in January, the Republican-controlled U.S. House approved a federal budget plan last week.   The plan passed with an overwhelming bipartisan 332-94 vote and now goes to the Democratic-controlled Senate.

Following significant backlash from the public over the 16-day shutdown in October, the measure demonstrated the potential for compromise between the two parties.

Though approval is expected this week, cooperation will be necessary if the plan is to pass in the Senate, where several Republicans continue to voice objections.  House Speaker John Boehner has criticized opposition from conservative colleagues as well as influential outside groups, noting the importance of reaching common ground to extend the budget through 2015.

The deal includes a $62 billion spending increase – offset by $85 billion in deficit-reduction measures – and softens across-the-board spending cuts to military and domestic programs.  The $85 billion includes cuts in the pensions of federal workers and military personnel, increases in security fees charged to airline passengers, and reduced payments to student-loan debt collections, among other measures.

Americans relying on unemployment benefits face uncertainty as Democrats were forced to drop their demand for an extension of emergency benefits, now set to expire on Dec. 28 for 1.3 million people.  Congress could address the issue by voting to extend benefits upon their return in January.

The plan does include a Medicare provision that stalls the scheduled 24 percent cut to the rates doctors are paid under Medicare.  Lawmakers are expected to use the time to formulate a permanent solution to Medicare cost issues.

Important to note is that the deal does not include an increase in the debt ceiling.  With the Treasury expected to reach its borrowing limit early next year, the issue is predicted to stay a bit of a powder keg between the two parties despite the recent cooperation on the budget.

The Senate will vote on the plan in the coming days prior to Congress’ holiday recess.