Deal reached on US budget

Deal to fund US government for two years averts another possible shutdown of federal services

Representative Paul Ryan, a Republican from Wisconsin (left) speaks as Patty Murray, a Democrat from Washington, looks on during a news conference at the US Capitol in Washington.  Photograph: Andrew Harrer/Bloomberg

Representative Paul Ryan, a Republican from Wisconsin (left) speaks as Patty Murray, a Democrat from Washington, looks on during a news conference at the US Capitol in Washington. Photograph: Andrew Harrer/Bloomberg


A cross-party Congressional committee has reached an agreement to fund the US government for two years, averting another possible shutdown of federal services in January when a short-term funding agreement runs out.

The deal marks a truce in more than two years of budget wars between Democrats and Republicans that has paralysed American politics culminating in a 16-day government shutdown in October.

Worth $83 trillion (€60 million), the deal will shave just $23 billion off the country’s $17 trillion debt pile, but the greater significance is that an agreement was reached as it may signal the beginning of the end to the long-running political brinkmanship that has hampered the country’s economic recovery.

Negotiated by Democratic senator Patty Murray and Republican congressman Paul Ryan, the respective heads of the Senate and House budget committees, the deal replaces $63 billion (€47 billion) of unpopular, indiscriminate domestic and military spending cuts with $23 billion of targeted savings.

In a joint appearance in the US Capitol last night, Murray and Ryan said that the agreement would end the US stumbling from crisis to crisis and avoid another government shutdown when a current short-term funding measure keeping federal services up and running expires on January 15th.

Describing the deal as a way to “get our government functioning at its very basic levels,” Ryan noted that the agreement was the first bipartisan accord to emerge from a divided Congress since 1986.

The agreement was “a clear improvement on the status quo,” said Ryan, the 2012 Republican vice-president candidate from Wisconsin. “It makes sure we don’t lurch from crisis to crisis.”

Murray, a senator from Washington state, said there were long-term problems not addressed in the deal, reached ahead of a December 13th deadline, but that it was a start of the parties finding common ground following years of bitter wrangling since Republicans won control of the House in 2010.

“This deal does not solve all of our problems but it is an important step. For far too long here in Washington DC, compromise has been a dirty word, especially when it comes to the budget,” she said.

President Barack Obama accepted that the deal fell short of the budget he wanted but praised both sides for reaching a compromise.

The “balanced” deal was “a good first step” and “designed in a way that doesn’t hurt our economy,” he said.

“This agreement doesn’t include everything I’d like, and I know many Republicans feel the same way. That’s the nature of compromise,” he said.

“But it’s a good sign that Democrats and Republicans in Congress were able to come together and break the cycle of short-sighted, crisis-driven decision making to get this done.”

The Republican House Speaker John Boehner called the cross-party deal “modest” but a “positive step forward.”

The agreement will require government workers to make larger contributions to their pensions, force travellers to pay higher fees on airline tickets to pay for airport security and cut hospital payments.

Republican negotiators refused to accept tax increases to offset this year’s painful across-the-board spending cuts known as the sequester, an unwelcome by-product of previous failed budget talks.

Even before it was announced, the agreement drew fire from far-right conservative Republicans who see the agreement as a sell-out on the party’s earlier commitment to deeper spending cuts.

“We need a government with less debt and an economy with more good paying jobs and this budget fails to accomplish both goals,” said Marco Rubio, the Republican senator from Florida tipped as a future presidential candidate.

Ryan, who is also viewed as a potential presidential contender for the party, will attempt to sell the agreement to reluctant rank-and-file Republicans at briefings today ahead of a likely vote by Congress before the House of Representatives breaks for Christmas on Friday.

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