A partial shutdown of the US federal government was postponed by a deal struck late Friday night between White House and congressional negotiators to resolve a protracted standoff on legislation to finance government operations.
The Obama administration agreed to $2 billion more in social spending cuts in return for an agreement by the Republican House leadership on a stop-gap continuing resolution that will fund the federal government through next Thursday. President Obama, House Speaker John Boehner and Senate Majority Leader Harry Reid also said they had reached a broader agreement to fund government operations through the end of the fiscal year, September 30, which is to be voted on by both houses of Congress next week.
The deal reportedly includes between $39 billion and $40 billion in social spending cuts in the current fiscal year budget, virtually the total amount demanded by Boehner. This is the largest-ever single-year reduction in domestic social spending.
Details are not yet available of exactly which programs will feel the brunt of the budget axe, but the cuts dwarf any previous austerity exercise. The cuts are four times those imposed by a Republican Congress in 1995-96, the only previous instance of a budget dispute forcing a partial shutdown of the federal government.
Speaking from the White House shortly after 11 PM, President Obama hailed the agreement as a boon to the American people, even as he acknowledged that it would entail "painful" sacrifices. In the course of his brief remarks, Obama twice boasted that he had signed on to "the largest annual spending cut in our history." Eager to send a signal that this deal was only a down-payment on far more sweeping cuts in social programs to come in the fiscal year 2012 budget, he said the agreement signified "beginning to live within our means."
Nearly one million federal workers had been given notice of layoff at their workplaces Friday, about half the total workforce. The shutdown would have affected the majority of civilian government workers, but US military and police forces, the intelligence agencies and the Department of Homeland Security were exempted and told to continue normal operations.
The driving force of the budget crisis has been the Republican-controlled House of Representatives, which demanded even greater cuts in current spending than the record $38 billion offered by the Obama administration. Many in the ultra-right Tea Party caucus regarded a shutdown of all non-military parts of the government as a positive good, while Christian fundamentalists demanded further restrictions on abortion rights as the price of passing a budget.
The final hours of negotiations reportedly focused on the continuation of $333 million in federal funding for women's health services provided by Planned Parenthood, which operates 800 health centers throughout the United States, the majority of them serving women in working class and low-income neighborhoods.