Spending cuts deal between Obama and Congress averts government shutdown

Spending cuts deal averts government shutdown

Spending cuts worth $38 billion will be implemented this year under a last -minute agreement made by the White House and Capitol Hill.

The deal prevented a looming federal government shutdown and excludes spending cuts for such programs as Planned Parenthood as originally proposed by Republicans.

"We fought to keep government spending down, because it really will affect and help create a better environment for job creators in our country," House Speaker John Boehner said after the issue was resolved.

The U.S. Congress passed a measure for a temporary extension of government services until April 14 to give it some time to work on a longer-term deal to close the fiscal year on September 30. An initial $2 billion in spending cuts will also be quickly implemented.

About 800,000 federal government workers were in danger of being let go because of a potential shutdown. Economic reports and tax processing would have been halted and federal facilities closed down if the two sides did not come up with the deal.

"Like any worthwhile compromise, both sides had to make tough decisions," President Barack Obama said. "Some of the cuts we agreed to will be painful."

Republicans were originally seeking an additional $23 billion worth of spending cuts than what the new agreement allowed. Their proposal to slash funding for the abortion program Planned Parenthood was temporarily scuttled in exchange for a pledge for the Senate to tackle the matter in the future.

National Public Radio, the funding of which the Republicans also sought to shut down, was likewise saved from spending cuts.

Posted by James Fried on Sunday April 10 2011, 12:27 AM EST. Ref: Bloomberg. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0