Shortly after Republicans approved Ryan as the Speaker, the House approved the negotiated budget deal by a vote of 266 to 167 with 187 Democrats and 79 Republicans supporting it. It was immediately sent over to the Senate using a previous bill that allowed Senate leaders to fast track the debate on the deal. Early on Friday morning the Senate went along with the deal by a vote of 63 to 35. The House action was the first step in wrapping up the first session of the 114th Congress while pushing budget and debt ceiling fights into the next presidential administration.

The budget deal that was approved was the result of closely held negotiations between the White House, Speaker John Boehner, Senate Majority Leader Mitch McConnell (R-KY), Senate and House Minority Leaders Harry Reid (D-NV) and Nancy Pelosi (D-CA). There had been hopes that John Boehner would agree to such as deal with his new ability to break with a significant block of his own party as a result of his pending retirement.

The biggest elements of the deal is that it extends the November 3 debt ceiling to approximately March 2017 nearly two months into a new administration. It adjusts the budget caps for this year and next fiscal year with moderate increases that may avoid some severe program cuts in many areas. Congressional appropriators will now have some added funding which will allow them to negotiate a 2016 budget between now and when current funding runs out on December 11.

The new budget caps for the current year (which started on October 1) is split between the Defense Department and non-defense domestic spending, something the President and Congressional Democrats had been promoting while offsetting the domestic spending and using a combination of cuts and off-budget spending to increase defense spending something many Republicans wanted. It adds approximately $112 billion over two years between defense and non-defense domestic spending. Specifically, $32 billion of the defense spending is off budget (from the Overseas Contingency Operations (OCO) account) this does not count against the caps and does not need to be offset. The remaining $80 billion is offset through a variety of actions and reductions.

For the two years in FY 2016 (October 1, 2015-September 30 2016) it increases the non-defense spending by $33 billion, which is $4 billion less that what the President requested ($37 billion) and the Defense Department gets $33 billion also (less than President’s request and Congressional Republicans goals) but $16 billion of the defense increase comes through the OCO. In FY 2017 (the proposed Administration budget in February 2016), there would be an increase of $23 billion for non-defense spending and the Defense Department would also receive the same, $23 billion increase (with $16 billion in OCO).

To make the deal possible Congress was able to patch together a number of budget reductions, revenue raisers and program changes to officially find money to allow an increase in spending caps. This part of the deal is not without controversy which may require some type of accommodation in the next few weeks.

One controversy revolves around the use of a Crime Victims Assistance fund which collects fines and other revenues and is used, especially in the most recent appropriations, to fund such programs as the Children’s Advocacy Centers, some shelters and CASA among the programing. There is an estimated $1.5 billion in a trust fund that was used as an offset and it is unclear what the impact will be on programs. The legislative language indicates that the changes will assure there will be adequate balances left to meet programmatic needs. Advocates were unclear what this will ultimately mean.

Another offset controversy revolves around a change in a crop insurance program raising the concerns and opposition of some farm-state members and yielding a promise of future fixes. Other offsets include selling some of Strategic Petroleum Reserve to raise revenue, selling telecom spectrum to raise revenue, maintaining some of the current caps/cuts under Medicare budget cap provisions and by enacting a series of changes to the Supplemental Security Disability Insurance program that will also result in an extension of the trust fund from next month through the next seven years.

Here is a link to the budget agreement text of the bill