John Boehner, center, announced a budget deal in the Capitol in Washington on Friday evening.
By Natali Bendavid and Janet Hook
Congressional leaders reached a last-gasp agreement Friday to avert a shutdown of the federal government, after days of haggling and tense hours of brinksmanship.
Speaker of the House John Boehner announced that an agreement has been met through both houses and the president to cut spending allowing the government to remain open |
Under the deal, the GOP won budget cuts of $39 billion for the remaining six months of the fiscal year, far more than either party had expected a few months ago. Democrats managed to hold off Republican demands to strip funding for the new health-care law and for a range of other Democratic priorities. GOP provisions to cut all federal funding to Planned Parenthood of America and National Public Radio also were dropped.
Also in the deal is a provision requiring an annual audit of the new Consumer Financial Protection Bureau, which had been created by last year's Dodd-Frank financial overhaul law. Republicans have been widely critical of the law.
The budget battle was the first big standoff in the new Washington power structure created by November's midterm election, in which Republicans seized control of the House on a surge of voter complaints about government spending. As bitter as the weekslong fight was, it served merely as a warm-up for bigger and more consequential battles to come. Some Republicans say they will vote against raising the federal debt ceiling in a few weeks unless it is accompanied by a plan to rein in deficits. In addition the GOP has laid out cuts and proposals in its budget plan for the next fiscal year that dwarf the deal struck Friday in scope and size.
One apparent winner Friday was Mr. Boehner, who negotiated budget cuts that a few months ago would have been hard to envision. Democrats' opening position was for no cuts at all. The final deal is evidence Washington has now turned its attention from new spending to cutbacks.
"We fought to keep government spending down, because it really will in fact create a better environment for job creators in our country,'' Mr. Boehner said Friday night in announcing the agreement.
Mr. Obama, speaking from the White House near midnight, said the two parties had worked together to produce "the largest annual spending cut in our history," and that "both sides had to make tough decisions.'' Despite being pushed into making cuts his party initially opposed, Mr. Obama sought to turn the deal to his advantage by saying it would protect Democratic priorities, such as federal spending on education and environmental programs.
Mr. Reid also hailed a "historic'' level of budget cuts.
Shortly after the leaders spoke, the Senate and House passed a short-term funding measure to keep the government operating until Friday; Mr. Obama signed that measure into law Saturday. It was intended to give legislative leaders time to sort out final details of the broader agreement that covers the rest of the fiscal year, which ends Sept. 30.
Lawmakers were scrambling to beat a deadline of midnight, when legislation funding government operations was due to expire, leaving federal agencies without authority to spend money. While lawmakers bickered in public and aides to congressional leaders negotiated in private, federal agencies prepared to furlough an estimated 800,000 government workers, close national parks, passport offices and other operations, and suspend an array of federal services.
The deal set spending for the remainder of the year at $39 billion less than was budgeted for 2010 and $79 billion less than Mr. Obama had requested. House Republicans had called for $22 billion in additional cuts.
The final package drops Republican-backed provisions that would have barred funding for Environmental Protection Agency regulation of greenhouse gases and for the Federal Communications Commission to implement "net neutrality" rules.
But it re-establishes a school voucher system for the District of Columbia, a longtime cause of House Speaker John Boehner (R., Ohio). That program provides low-income children with vouchers to attend a school of their parents' choice.
Republicans had wanted to cut off funding for the new, Democratic-backed health-care law, and they wanted to turn federal aid to family planning programs into block grants to the states. The final deal includes neither provision, but it requires the Senate to take up-or-down votes on both of them.
President Obama addresses the bipartisan agreement on the national budget from the Blue Room of the White House. Video courtesy of New |
"I think it will be fairly widely supported,'' said Rep. Tom Price (R., Ga.), a former chairman of the Republican Study Committee, a conservative caucus of House Republicans.
Some GOP lawmakers said they would oppose the deal. Rep. Jim Jordan (R., Ohio), current chairman of the Republican Study Committee, said he planned to vote against it because the measure failed to meet the group's target of $61 billion in cuts.
Democratic leaders likely will have to contend with the party's sizable liberal faction, which could be furious that Messrs. Obama and Reid agreed to such spending reductions. Many Democrats are also dissatisfied with Mr. Obama's decision to keep a relatively low profile during much of the debate, only to surface at the end and try to position himself as the adult.
House Minority Leader Nancy Pelsoi (D., Calif.) stopped short of endorsing the deal. "House Democrats look forward to reviewing the components of the final funding measure,'' she said.
The immediate implications of the budget deal will be limited, since it covers only the remaining six months of fiscal 2011. Its spending cuts come from only a portion of the federal budget, leaving untouched spending on the major health-care and pension entitlement programs that are not funded by annual appropriations.
But the budget fight has set the stage for other, more sweeping battles, as the divided capital takes on the 2012 budget and the nation's long-term deficits—and possibly spending on the popular Medicare and Social Security programs. Messrs. Boehner, Obama and Reid will likely be subjected to the same pressures in those debates as in this one.
Mr. Boehner has been caught between a desire to show that Republicans can use their new House majority to govern effectively and conservatives who discouraged compromise.
Mr. Obama has sought to stay above the fray, a strategy that risked making him appear disconnected from his party and the biggest issue of the day. And Democrats have given significant ground on spending while trying to tie the GOP to a tea party movement that Democrats continually describe as "extremist.''
Throughout Friday, Messrs. Reid and Boehner were simultaneously jockeying with each other to deflect blame for the budget impasse while reaching out to their partisan bases.
Mr. Reid said a final obstacle to the deal was Mr. Boehner's insistence on changing the Title X program, which provides family-planning services to low-income women. Democrats said the GOP was pushing to turn Title X into a block grant to states, allowing conservative governors to gut the program because it would give them more discretion in how to use those funds.
"We are not bending on women's health," Mr. Reid said.
Mr. Boehner, by contrast, said differences over social provisions had largely been resolved and the final dispute was over spending levels. "There is only one reason that we do not have an agreement yet, and that reason is spending," Mr. Boehner said early on Friday.
Democrats argued that block-granting Title X, which has an annual budget of $317 million, would cripple it and damage Planned Parenthood Federation of America, which receives about one-fourth of Title X money.
Planned Parenthood provides abortions but by law can't use federal money for that procedure. Instead, Democrats said it uses Title X funds to provide such services as mammograms and cervical cancer screening to low-income women.
Still, many Republicans were upset at the notion of an abortion provider getting any federal money.
The Center for Responsive Politics reports that the Planned Parenthood political action committee donated $286,986 to federal candidates in the 2010 election cycle, 99% of it to Democrats.
— Carol E. Lee contributed to this article.
Write to Naftali Bendavid at naftali.bendavid@wsj.com
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