Paul Ryan and Patty Murray both briefed colleagues on Tuesday. Budget agreement reached

Rep. Paul Ryan and Sen. Patty Murray unveiled a two-year budget agreement late Tuesday night that they say will end years of bitter budget wars on Capitol Hill.

The framework amounts to a modest deal that averts another government shutdown, replaces the sequester and provides a level of certainty on spending that hasn’t been seen in Washington for several years. But it doesn’t raise the debt ceiling, which Congress must address sometime next spring. And it’s far from a grand bargain that overhauls entitlement programs or the tax code — an approach the negotiators refused to entertain for fear of getting bogged down.


The bipartisan package includes $63 billion of “sequester relief,” $85 billion of total savings, and $23 billion in net deficit reduction. The agreement would set the discretionary spending level for fiscal year 2014 at $1.012 trillion, and $1.014 trillion in FY 2015.

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President Barack Obama backed the deal and Ryan and Murray predicted that it would pass both the House and Senate. Still, both lawmakers acknowledged that conservatives and progressives will find items they don’t like in the package.

For instance, a number of top House Democrats are unhappy the agreement does not include an extension in federal unemployment benefits expiring on Dec. 28. Meanwhile, federal workers hired after Dec. 31, 2013, will have to pay more toward their retirement.

Conservatives will be equally displeased that the plan will require businesses to pay higher premiums to the federal government to guarantee their pension benefits.

Those under age 62 who retired from the military will see a slightly smaller annual cost-of-living increase. Tickets prices will rise for airline passengers. And Medicare providers will face $22 billion in across-the-board cuts in 2022-23, beyond the time period covered by the current Budget Control Act.

( Also on POLITICO: Conservatives balk at budget deal)

Murray and Ryan, however, stood side-by-side to hail the deal as progress, not perfection. They both repeatedly said it was just a “first step.” And both lawmakers said far more work needs to be done to revamp the U.S. government’s fiscal outlook, while still urging their colleagues to back this agreement.

“This bill reduces the deficit by $23 billion, it does not raise taxes, and it cuts spending in a smarter way,” Ryan said at Tuesday night press conference. “I see this agreement as a step in the right direction.”

“I’m proud of this agreement,” Ryan added. “It reduces the deficit—without raising taxes. And it cuts spending in a smarter way. It’s a firm step in the right direction, and I ask all my colleagues in the House to support it.”

“This agreement breaks through the recent dysfunction to prevent another government shutdown and roll back sequestration’s cuts to defense and domestic investments in a balanced way,” said Murray. “It’s a good step in the right direction that can hopefully rebuild some trust and serve as a foundation for continued bipartisan work.”

In a statement issued by the White House, Obama also praised the Ryan-Murray package.

“This agreement doesn’t include everything I’d like – and I know many Republicans feel the same way. That’s the nature of compromise,” Obama said. “But it’s a good sign that Democrats and Republicans in Congress were able to come together and break the cycle of short-sighted, crisis-driven decision-making to get this done.”

Party leaders on both sides of the Capitol, including House Majority Leader Eric Cantor (R-Va.) and Senate Majority Whip Dick Durbin (D-Ill.) also issued statements backing the deal.

Rep. Chris Van Hollen (D-Md.), ranking member on the House Budget Committee, offered more tepid support.

“This agreement isn’t perfect, but it is certainly better than no agreement at all,” said Van Hollen, a key player in the House Democratic Caucus. “This difficult negotiation has gone through many phases. The final product replaces part of the job-killing sequester without disproportionally hitting working families, including hundreds of thousands of public servants. It’s a small, but good step forward for our country.”

Both Murray and Ryan said the agreement, coming after weeks of tightly controlled talks between the two Budget Committee chairmen, will provide certainty for business leaders and financial markets that has been missing since the GOP takeover of Congress in 2010.

House Republican leaders, eager to wrap up their legislative year Friday, want to vote on a budget plan late this week. If the Ryan-Murray compromise is not passed before the weekend, aides say, it would give potential opponents more time to pressure conservative lawmakers — and unhappy Democrats — to block it.

The Ryan-Murray budget agreement, no matter how modest, is a respite from three years of unceasing budget wars. It doesn’t raise loads of new revenue, like some Democrats want, nor does it restructure entitlement programs, like many Republicans want. It simply softens the blow of across-the-board spending cuts enacted under the 2011 Budget Control Act, and sets new spending levels for the 2014 and 2015 fiscal years.

Instead of the $967 billion the government was slated to spend for FY 2014 under that Budget Control Act, the tab will be closer to $1.012 trillion, while shifting tens of billions of cuts from the Pentagon that the White House and military leaders said would hurt U.S. national security. That will increase to $1.014 trillion in FY 2015.

Deficit reduction, however, will stay the same.

Rep. James Lankford, an Oklahoma Republican in leadership, said he hasn’t reviewed the Ryan-Murray plan in detail, and added that he is focused on how much will be sliced from the nation’s deficit.

“I’m looking at the deficit reduction numbers,” Lankford said Tuesday. “Are we reducing the deficit? That is the goal. The discretionary numbers, people can track internally here, but are we reducing the deficit?”

On the Senate side, key players are signaling that they are amenable to the emerging budget framework. Sen. Barbara Mikulski (D-Md.), the chairman of the Senate Appropriations Committee, said she “can live with” the government spending level of $1.012 trillion.

“I will have to take a $45 billion downgrade from the Senate number, but the House is coming up $45 billion, so I think that’s a rational compromise,” she said, referring to the original spending targets of both chambers.

But House Minority Whip Steny Hoyer (D-Md.) said he “didn’t like” what he’d seen out of the Ryan-Murray package although the veteran lawmaker did not say he would oppose the measure.

Now it’s up to Ryan, Speaker John Boehner (R-Ohio), Senate Majority Leader Harry Reid (D-Nev.) and Murray to shepherd an agreement through Congress. The House Republican Conference will meet Wednesday morning at 9 a.m., where the budget is sure to be a central part of the discussion.

The White House played an active role behind the scenes in keeping Hill Democrats apprised of the President Barack Obama’s priorities in a budget deal. But in contrast with past spending fights, most recently the government shutdown in October, the White House shied away from big public pronouncements this time, preferring instead to encourage lawmakers to go through the “regular order” process of House and Senate leaders sitting down to work out a solution. In this case, the lower-key approach appears to have been helpful in reaching a deal.

Three top Obama aides, White House chief of staff Denis McDonough, Deputy Chief of Staff Rob Nabors, and Office of Management and Budget Director Sylvia Mathews Burwell, met Tuesday with Senate Majority Leader Harry Reid, House Minority Leader Nancy Pelosi, and the senior Democrats on the Senate and House budget committees, Murray and Van Hollen in Reid’s office.

On Monday, according to a source familiar with the call, Obama spoke with Pelosi by phone, as he had last week, and he talked with Murray over the weekend. McDonough has been a frequent visitor and caller to Capitol Hill as lawmakers homed in on a budget deal, including in a Monday session with Reid, Pelosi and Van Hollen, the source said.

Generally speaking, the White House has been supportive of congressional Democratic efforts to increase discretionary spending above the levels mandated by sequestration in a 2011 budget agreement. But the devil has been in the details of how to offset a boost of more than $30 billion.

In his fiscal 2014 budget, released in the spring, Obama proposed a change in the way federal civilian workers’ retirement payments are financed that would net $20 billion over 10 years. But that was too steep a price to pay for many Democrats, most notably those who represent districts in the Washington metropolitan area, which are saturated with government employees.

The idea of softening the impact of that move by raising money from military retirement accounts has gained some traction with defense hawks in the GOP as well as Democrats who represent federal civilian workers.

Jon Allen contributed to this report.