Congress Strikes a Budget Deal to Avert Shutdown, Cutting $38.5B

April 9, 2011


Congressional leaders, with barely an hour to go before a federal government, announced late Friday night they had reached a deal to fund the government through the end of the fiscal year.

The deal includes $38.5 billion in spending cuts while leaving the more contention policy matters, such as blocking funding for Planned Parenthood, for a later debate.

The Senate passed a short-term spending measure Friday night to buy lawmakers the time needed to prepare and pass the final budget bill next week. The House passed the measure early Saturday, which will be signed by President Obama when he receives it, according to senior administration officials.

“This agreement between Democrats and Republicans on behalf of all Americas is a budget that invests in our future while making the largest spending cut in our history,” Obama said in a short speech to the nation after the deal had been announced.”Today Americans of different beliefs came together again.”

Shortly after midnight, White House budget director Jacob Lew issued a memo instructing the government’s departments and agencies to continue their normal operations.

Of the $38.5 billion in spending cuts to Obama’s original 2011 budget proposal, the short-term stopgap measure contains the first $2 billion and the final budget bill will cut the other $36.5 billion.

Boehner said the agreement came after “a lot of discussion and a long fight,” and he won an ovation from his rank and file.

“We fought to keep government spending down because it really will be a jobs creator for our country,” Boehner said.

On Friday, senior administration officials said Obama made it clear to his staff that he wanted them to stay out of the limelight and let the legislative process work. He urged them to avoid making comments that would hamper a potential deal.

It was a remarkable end to a roller-coaster week of negotiations, in which the government several times seemed headed for a shutdown because the two sides couldn’t agree on a full-year budget.

Obama has already signed two temporary spending bills, which included a total of $10 billion in spending cuts, but he said this week he wasn’t interested in any more short-term fixes.

As late as hours before the agreement, a government shutdown seemed quite possible — if not inevitable — as both sides couldn’t even agree, at least in public, on what was holding up a deal.

Democrats said Republicans were pushing for social policy measure, while Republicans said the Democrats hadn’t agreed to enough spending cuts.

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