Government Shutdown Averted; Last Minute Deal Announced

By: From CBS News/ 13 News
By: From CBS News/ 13 News

CAPITOL HILL, TONIGHT (CBS News) -- Lawmakers in Washington announced late Friday that lawmakers reached a compromise deal to avert a government shutdown just hours before the shutdown would have taken effect.

"Tomorrow, I'm pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business," President Obama said around 11:00 p.m., just one hour before the midnight deadline.

Mr. Obama said the spending cut in the budget agreement reflected the biggest annual spending cut in U.S. history.

"Both sides had to make tough decisions and give ground on issues that were important to them, and I certainly did that," he added. "Some of the cuts we agreed to will be painful; programs people rely on will be cut back; needed infrastructure projects will be delayed; and 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."

In a statement, Republican House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid said: "We have agreed to an historic amount of cuts for the remainder of this fiscal year, as well as a short-term bridge that will give us time to avoid a shutdown while we get that agreement through both houses and to the President."

"We will cut $78.5 billion below the President's 2011 budget proposal, and we have reached an agreement on the policy riders," they said. "In the meantime, we will pass a short-term resolution to keep the government running through Thursday. That short-term bridge will cut the first $2 billion of the total savings."

Kansas Senator Jerry Moran explained what happens next, after releasing this statement on the Senate passage of a short-term funding bridge.

“The goal of the short-term continuing resolution passed tonight is to provide sufficient time for the finishing touches to be put on an announced agreement between Republican and Democrat leaders on a longer-term spending measure for the remainder of fiscal year 2011.

"I am anxious to see the details of this agreement and hope it includes the necessary spending cuts. We need to move on to the significant discussion of reducing spending in 2012 and beyond, and set our country on the path toward a stronger economy and more jobs.”

Mr. Obama's 2011 budget proposal was never passed; the actual cuts in the bill were about $38.5 billion for the current fiscal year.

The riders to which they refer include a GOP rider to to defund Planned Parenthood, which Reid had suggested had been the final sticking point in negotiations. Republicans wanted to scrap about $300 million in federal grants that go to 4,500 different clinics around the country, about a quarter of them run by Planned Parenthood. CBS News sources said that rider was not included in the final deal, but that as part of the agreement a standalone bill on the matter will get a vote.

Mr. Obama said Democrats made sure that "at the end of the day this was a debate about spending cuts, not social issues like women's health and the protection of our air and water."

"These are important issues that deserve discussion, just not during a debate about our budget," he said.

Boehner said in brief remarks he was "pleased" at the deal. Reid, appearing on the Senate floor shortly after the announcement, said the agreement on the policy riders had "not been easy."

Speaking of the last-minute deal, Reid said, "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."

"This is historic what we've done," he added.

Lawmakers will pass a short-term stopgap resolution tonight to keep the government funded through next Friday. They then plan to pass the longer-term budget bill to fund the government for the rest of the fiscal year mid- to late next week. The Senate has already passed the short-term bill.

Boehner has faced pressure from the Tea Party not to compromise with Democrats on spending cuts. Amid reports a deal had been reached, Tea Party Nation's Judson Phillips Tweeted, "Boehner is selling us out tonight. We will primary Boehner next year."

At issue in the overall discussions is funding for the federal budget for the rest of Fiscal Year 2011, which lasts another six months. House Republicans passed a bill including $61 billion in cuts earlier this year, but the Democrat-led Senate rejected the bill, saying the cuts went too far.

Negotiators worked feverishly to avert a shutdown, which would have meant the furlough of hundreds of thousands of federal workers, the closure of national parks and federal agencies and the suspension of pay for members of the military. It would also have delayed small business loans and mortgage applications. President Obama said it would have been inexcusable not to reach a deal.

This fight, dramatic as it has been, may just be a warm up. The parties are expected to but heads in coming months over raising the debt ceiling as well as a budget for the next fiscal year, which is expected to include some degree of reform to entitlement programs like Medicare and Medicaid.

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