4 Ways the Federal Budget Deal Would Hit Your Wallet

This post comes from Julie Tilsner.

Never let it be said that our lawmakers in Washington can’t get things done. Mere days before the winter recess, House Budget Committee Chairman Paul Ryan, R-Wisc., and Senate Budget Committee Chairwoman Patty Murray, D-Wash., announced a budget agreement that would keep the government open through the fall of 2015.

It has its critics. Neither side is thrilled. But it also would mean no more government shutdowns or threats of a government default on its debt. That’s a blessing.

As Joshua Green wrote for BloombergBusinessweek, “The October shutdown reduced projected fourth-quarter gross domestic product growth by about a half percent, while Republican default threats pushed up U.S. bond yields across every maturity, raising U.S. borrowing costs and adding to the federal debt.”

Should this agreement pass muster in the House and Senate, here’s how it could directly impact your wallet:

1. Airline tickets will cost more

Fees that help support the Transportation Security Administration would increase beginning July 1.

CNN explains:

The Ryan-Murray agreement would raise the TSA security charge to $5.60 for any one-way trip. So $11.20 round trip. Currently, the so-called “9-11 fee” is $2.50 for a nonstop flight and $5 for travel that involves connecting flights. The deal would charge the same $5.60 regardless of whether the flight plan was nonstop or not.

2. Your unemployment will not be extended

The agreement does not extend federal unemployment benefits, which are set to expire Dec. 28 for 1.3 million Americans who’ve been unemployed for at least half a year.

Because unemployment benefits translate into economic activity, that’s $39 billion the economy won’t be seeing next year, Joshua Green wrote.

3. Smaller increases for military retirees

Annual cost-of-living increases for military retirees who are under the age of 62 would be reduced slightly. The reduction would not apply to those who retired because of injury, Reuters says.

4. New federal workers will contribute more for their retirement

This wouldn’t affect current employees. The Washington Post explains:

The agreement would create a three-tier system for employee contributions to their civil service pensions. Those hired before this year pay 0.8 percent of their salary, those hired in 2013 pay 3.1 percent and those hired after Jan. 1 would pay 4.4 percent under the budget agreement.

What are your thoughts about this proposed bipartisan budget deal? Let us know in the comments below or on our Facebook page.