Budget deal reached; Murray, Ryan behind negotiations

WASHINGTON -- Negotiators have reached a bipartisan deal on a new federal budget plan that would set spending levels and eliminate arbitrary forced spending cuts scheduled to hit early next year, multiple sources said on Tuesday.

Both the House and Senate must still vote on the agreement that also is seen as important for averting a government shutdown like the one in October caused by the inability of Congress to agree on spending for the current fiscal year.

Opponents in both parties immediately raised concerns about the agreement, which, if passed by Congress, would mark a significant departure from repeated congressional showdowns over the budget in recent years.

Earlier, House Budget Committee Chairman Rep.Paul Ryan told reporters that "we're making really good progress, we're getting close."

Ryan and Democratic Senator Patty Murray have spent the past two months working on an agreement that would set government spending levels and replace the next round of deep automatic cuts -- known as sequester -- set to take effect early next year.

Negotiators were tasked with reaching a deal following October's budget drama in Washington, when inaction by Congress on spending for the current fiscal year led to a 16-day federal shutdown.

Congress passed temporary spending authority after the shutdown that expires in mid-January. With the Republican-led House leaving town on Friday for the holidays, negotiators worked for a deal this week to give Congress its best shot at weighing a spending proposal when it returns in early January to avoid another fiscal debacle as the new year gets underway.

Ryan cited progress, but there were signs of pushback from the right and left over pension contributions and unemployment compensation.

On the Democratic side, two key House leaders -- Rep. Chris Van Hollen and Rep. Steny Hoyer -- have strongly objected to the idea of including an increase in federal worker pension contributions as part of the deal.

Both men represent Maryland districts heavily populated by federal employees.

Democratic pushback may have gained them some ground.

"The proposal that's before us - it's a little bit better than it was yesterday. We made progress. But it hasn't fully satisfied us yet," said Democratic Rep. Steve Israel of New York.

Democrats also are pushing for an extension of unemployment benefits to be in the deal, and Murray put it on the table in the budget negotiations.

On Tuesday, the No. 2 Democrat in the Senate, Dick Durbin of Illinois, indicated the politically charged issue may be separated from budget talks.

"From my understanding, that's more between Speaker (John) Boehner and (President Barack Obama) at this point," Durbin told CNN.

While they insist jobless benefits be addressed before Congress adjourns, multiple House Democrats suggested any extension could be attached to other must-pass measures -- like a farm bill extension or legislation covering Medicare reimbursements for doctors.

Israel, however, said fellow Democrats are not ready to concede that an unemployment extension "won't be part of the budget."

On the right, conservatives are pushing back at any change in the spending caps that were put in place in the 2011 budget law that set in motion the sequester cuts.

Three conservative organizations--Americans for Prosperity, Heritage Action and Freedomworks-- issued statements Tuesday urging conservatives to oppose any deal that would roll back the caps or set higher spending levels.

The political objections create a significant issue in the House, where any deal would likely need a coalition of Republicans and Democrats to pass.