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Tags: Lawmakers | Reach | Deal | Avert | US | Govt | Shutdown

Lawmakers Reach Deal to Avert Govt Shutdown

Saturday, 09 April 2011 12:22 AM

U.S. Congress leaders reached an accord late Friday night to cut about $38 billion from federal spending this year while jettisoning Republican proposals to defund Planned Parenthood and block environmental rules, pulling the government back from the brink of a shutdown.

The agreement was announced less than two hours before the government’s funding authority was due to expire, which would have started a partial shutdown of services and offices.

“It’s been a grueling process. We didn’t do it at this late hour for drama; we did it because it’s been very hard to arrive at this point,” Senate Majority Leader Harry Reid, a Nevada Democrat, said on the Senate floor with less than an hour to go before the midnight deadline for the shutdown. “Both sides have had to make tough choices.”

The Senate quickly passed a stopgap measure that makes $2 billion of the agreed-upon cuts and keeps the government open through April 14 while lawmakers draft legislation implementing the longer-term agreement, which funds the government through the Sept. 30 close of the current fiscal year.

The House approved the stopgap bill early Saturday.

House Speaker John Boehner, an Ohio Republican, said he was “pleased” with the outcome of what he called a “long fight” over 2011 budget

“We fought to keep government spending down, because it really will affect and help create a better environment for job creators in our country,” he told reporters.

‘Different Beliefs’

At the White House, President Barack Obama, who stepped in this week to prod an agreement after weeks on the sidelines, said the deal was possible because “Americans of different beliefs came together.”

“Like any worthwhile compromise, both sides had to make tough decisions,” Obama said. “Some of the cuts we agreed to will be painful.”

The deal came together after days of negotiations at the Capitol and in the White House among Boehner, Reid, Obama and their aides over how much spending to cut and from which programs, as well as so-called policy riders Republicans proposed to govern how federal money could be used.

The final compromise to slash about $38 billion in spending is about $23 billion less than Republicans had initially sought, yet tens of billions more than Democrats originally said they could accept. It stripped most of the dozens of policy limits Republicans were seeking to impose on the Obama administration, while narrowing a handful of others Democrats said they could tolerate.

Planned Parenthood

A provision barring federal funding for Planned Parenthood, the women’s health provider that performs abortions, was dropped in exchange for a commitment that the Senate would vote on defunding the organization.

The Senate also would vote on repealing the U.S. health- care overhaul enacted last year, according to a summary of the deal released by Boehner’s office.

Several provisions that would have barred the Environmental Protection Agency from regulating greenhouse gas emissions or other pollutants were abandoned.

Among the riders that survived were a ban on federal funding for abortions in the District of Columbia.

Republican Representative Devin Nunes of California said that as part of the deal, a study will be conducted of the financial regulation measure enacted last year. Critics have said some of the law’s requirements place onerous requirements on business.

Best Republicans Could Get

In a closed-door meeting last night at which he described the agreement to colleagues, Boehner said it was best Republicans could get out of Democrats, according to an aide who spoke on condition of anonymity because of not being authorized to disclose the private discussions.

The agreement ends a months-long dispute over funding for the rest of the 2011 fiscal year. Last year’s Democratic Congress failed to enact a budget before the year started Oct. 1, and since then the government has been funding by a series of stopgap measures.

The spending cuts exceed what House Republican leaders proposed earlier this year before their rank-and-file colleagues forced them to push for $61 billion in reductions in the budget bill the chamber passed in February.

Tougher Battles

The accord also clears the way for potentially even tougher battles over the government’s finances. A spending plan for the 2012 fiscal year prepared by House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, and scheduled for a vote in the chamber next week would phase out the government-run Medicare program -- a proposal Democrats denounced. It also would cut spending by $6 trillion over a decade and reduce the top tax rate to 25 percent.

Also looming is a possible fight over raising the government’s $14.3 trillion debt limit, expected to be breached by May 16. Many Republicans are demanding the Obama administration commit to deep spending cuts as the price for their votes to raise the limit.

“There’s very little enthusiasm around here for increasing the debt ceiling if we don’t also do something to constrain future spending,” Senator Jon Kyl, the chamber’s second-ranking Republican, said Friday.

While a government shutdown threatened to furlough thousands of federal employees and inconvenience many more, Treasury Secretary Timothy Geithner has cautioned that failing to raise the debt cap would trigger a financial crisis in part by sparking a surge in interest rates.

“The consequences of that would be catastrophic,” Geithner told a Senate Appropriations Committee panel this week.

© Copyright 2022 Bloomberg News. All rights reserved.

U.S. Congress leaders reached an accord late Friday night to cut about $38 billion from federal spending this year while jettisoning Republican proposals to defund Planned Parenthood and block environmental rules, pulling the government back from the brink of a...
Lawmakers,Reach,Deal,Avert,US,Govt,Shutdown,Cut,38.5 Billion
Saturday, 09 April 2011 12:22 AM
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