Congressional budget deal could come soon

WASHINGTON (AP) - Bipartisan budget negotiators are working toward a modest budget agreement to replace tens of billions of dollars in spending cuts this year and next with longer-term savings and revenue from increased fees.

House Budget Committee Chairman Paul Ryan, R-Wis., and Senate counterpart Patty Murray, D-Wash. Hope to strike an agreement as early as Tuesday afternoon.

The two have been holding secretive talks for weeks aimed at producing an accord to replace some, but not all, of the automatic spending cuts known as sequestration. Budget experts briefed on the talks predict that any bargain may replace $40 billion - about half of the cuts for the 2014 fiscal year - and a lesser amount for 2015.

The automatic cuts are the consequence of Washington's failure to follow up a 2011 budget pact with further deficit cuts. They would carve $91 billion from the day-to-day budgets of the Pentagon and domestic agencies when compared with sending limits set by the hard-fought 2011 budget agreement.

The White House, defense hawks and congressional pragmatists are those most eager for an agreement, but it's already attracting opposition from conservatives seeking to preserve spending cuts and liberals unhappy about requiring federal workers to contribute more to their pensions. And Democrats are still seeking to win renewal of federal unemployment benefits for people who have been out of work for six months or more.

Conservative interest groups like Heritage Action and Americans for Prosperity are already urging Republicans to oppose the measure even before it's been made public. Unions representing federal workers are pressing Democrats to oppose it as well. A group of prominent House conservatives has written to top GOP leaders urging them to preserve the $967 billion spending level required under sequestration.

But the alternative is continued sequestration cuts that have meant furloughs of federal workers, harmed military readiness and forced across-the-board cuts to the approximately $1 trillion portion of the $3 trillion-plus federal budget that's set by Congress each year.

"I am really...cautiously optimistic that we have a deal," said Senate Appropriations Committee Chairwoman Barbara Mikulski, D-Md. "No. 2, that we get a top line for two years and a partial cancelling of sequester. The good news is we didn't let them shred the social safety net."

The central elements to the potential agreement, aides and budgets experts briefed on the talks say, would be to require federal workers to contribute more to their pensions, increase a post-Sept. 11 security fee to add $5 to the cost of a typical round-trip flight and require corporations whose pension plans are guaranteed by the government to pay higher premiums. Medicaid payments to hospitals that care for a "disproportionate share" of uninsured people may also get cut.