U.S. Congress leaders reached an accord last 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 a shutdown. “Both sides have had to make tough choices.”
The Senate and the House of Representatives 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 a longer-term agreement to fund the government through the Sept. 30 close of the current fiscal year. Both chambers will vote on that measure next week.
House Speaker John Boehner, an Ohio Republican, said he was “pleased” with the outcome of what he called a “long fight” over the 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 after weeks on the sidelines stepped in this week to prod an agreement, 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 Washington Monument, honoring America’s first president, loomed through a window behind Obama in his televised comments. He began his remarks with a reference to the landmark, saying, “I’m pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business.”
Policy Riders
The deal came together after days of negotiations at the Capitol and the White House among Boehner, Reid, Obama and their aides over how much spending to cut and from which programs, as well as over so-called policy riders Republicans proposed to direct how federal money could be used.
The final compromise slashes about $38 billion in spending -- 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.
A provision barring federal funding for Planned Parenthood, the women’s health provider that offers abortion services in some locations, was dropped in exchange for a commitment that the Senate would vote on defunding the organization.
Republicans dropped their bid to use the measure to cancel funding for the health-care overhaul enacted last year, and Democrats in turn agreed to hold a separate Senate vote on repealing the law, 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.
Abortion Funding
Among the riders that survived were a ban on taxpayer funding for abortions in the District of Columbia and $2 million for a voucher program that is a personal cause of Boehner’s and provides low-income students in the District with federal money to attend private schools.
As part of the deal, studies 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.
The agreement would include funding for National Public Radio, which Republicans had attempted to end. It also would strip Republican riders that sought to block the Federal Communications Commission’s “net neutrality” Internet rules as well as the Education Department’s efforts to clamp down on for- profit colleges.
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.
Months-Long Dispute
The months-long dispute over the 2011 budget stemmed from the failure of last year’s Democratic-controlled Congress to enact a spending plan before the fiscal year started Oct. 1. Since then, the government has been funded by a series of stopgap measures.
Republican took control of the House following November’s elections vowing to make deficit reduction one of their prime missions. The spending cuts agreed to yesterday exceed what House Republican leaders had proposed earlier this year before their rank-and-file forced them to push for $61 billion in reductions in the budget bill the chamber passed in February.
Other Battles
The accord 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 traditional Medicare program -- a proposal Democrats have 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 fight over raising the government’s $14.3 trillion debt limit, expected to be breached by May 16. Many Republicans are demanding that the Obama administration commit to deep spending cuts as the price for their votes to raise the limit.
“In order to raise the debt ceiling, we need to do something significant about the debt,” Senate Minority Leader Mitch McConnell, a Kentucky Republican, said yesterday. “My definition of ‘significant’ is that the markets view it as significant, the American people view it as significant and foreign countries view it as significant.”
To contact the reporters on this story: Julie Hirschfeld Davis in Washington at jdavis159@bloomberg.net; Brian Faler in Washington at bfaler@bloomberg.net
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