Agreement Reached to Avert Shutdown

A budget agreement has been reached that cuts $38.5 billion in spending and will keep the government running through the end of the fiscal year.

A short term resolution was passed late Friday night to keep the government running through Thursday that will allow ample time to get agreements on a finalized budget from both Houses and the President. The agreement cuts $38.5 billion total from the President’s original budget proposal. 

The stopgap bill cuts $2 billion total from items such as transportation and housing programs, including $1.5
billion from a high-speed rail program and $280 million from
capital investment grants. The finalized budget deal will cut around $36.5 billion and includes cuts such as $17.8 billion
from benefit programs and $3 billion from defense programs. House Speaker John Boehner said that over the next decade it would cut government spending by $500 billion.

“This is historic what we’ve done,” said Harry Reid referring to the spending
cuts. “We all agree that there are many cuts that have to take place in
the future; we must get this country’s fiscal house in order.”

“We fought to keep government spending down because it really will be a jobs creator for our country,” Boehner said. President Obama called it “the largest annual spending cut in our history.”

Reid also said that the deal wasn’t passed as late as it was for dramatic
effect, but rather because the process of reaching an agreement has been
extremely difficult. 

The bill passed the Senate within seconds after Reid’s announcement of the agreement, and passed the House shortly thereafter. Even though the House vote wasn’t completed until shortly after midnight, no funding interruption was expected.

President Obama gave a short address from the White House announcing the agreement to avoid the shutdown and saying that the government will be open for business on Saturday.  OMB Director Jacob Lew echoed the statement with a memo confirming that federal agencies are indeed expected to continue with their normal operations as a result of the agreement.

Obama stated, “Both sides had to make tough decisions and give ground on issues that were important to them. Some of the cuts we agreed to will be painful; I would not have made these cuts in better circumstances, but beginning to live within our means is the only way to protect those investments that will help America compete for new jobs.  We protected the investments we need to win the future.”

The President stressed that it was a debate about spending cuts, not social issues. He said the social issues are important, but should be discussed later outside of the budget debates.