US Congress strikes deal to avoid shutdown

Days before Congress closes for its Christmas break, negotiators reached a bipartisan budget deal that would avoid a government shutdown for at least two years.

The deal - if passed as expected - includes a two-year truce on the kind of legislative battle that led to the shutdown in October.

Though criticised for being limited in ambition, it drew support from US President Barack Obama as well as a number of leading Republicans, including House of Representatives Speaker John Boehner.

Mr Obama called it a "good first step" and an important signal that deeply polarised Washington could still find common ground.

"This agreement doesn't include everything I'd like - and I know 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. That's the way the American people expect Washington to work."

Mr Boehner's statement similarly hailed the "positive step forward" although he was relatively less effusive.

He said: "Federal spending remains on an unsustainable course. Whether it is offering a plan to balance the budget, strengthen the federal safety net, or cut wasteful spending on behalf of hardworking taxpayers, only one party has led efforts to bring fiscal sanity back to Washington."

The deal is far from a grand bargain between Republicans and Democrats, and leaves both sides with things to be unhappy about.

Democrats had to walk away from their push to include an extension to long-term unemployment benefits as part of the deal, while Republicans have to now accept that the severe across-the- board budget cuts they secured in 2011 will be replaced by gentler spending reforms.

Conservatives who have made deficit reduction a core platform saw the 2011 cuts as a key victory, and are unhappy that the government will now be able to spend US$1.012 trillion (S$1.3 trillion) next year instead of the US$967 million set originally.

It also removes the possibility of the budget being held hostage at least until Sept 30, 2015. In October, an impasse caused the federal government to be shut down for 16 days, as Republicans refused to pass a temporary spending measure unless it included steps to roll back Mr Obama's signature health-care legislation.

Without Tuesday's agreement, both sides would have had to be back at the table by Jan 15.

The bulk of initial opposition to the deal brokered by Republican Representative Paul Ryan and Democratic Senator Patty Murray appeared to come mainly from the far right.

Republican Senator Marco Rubio, who is believed to be eyeing a run for the White House in 2016, issued a statement opposing the deal, saying that Americans "deserve better than this".

Yet both Mr Ryan and Ms Murray said they were confident that they would secure enough votes to get the budget passed by the end of the week.

Said Mr Ryan: "In divided government, you don't always get what you want... I think this agreement is a clear improvement on the status quo."

Ms Murray, for her part, said: "It is an important step in helping heal some of the wounds here in Congress."

jeremyau@sph.com.sg

Get a copy of The Straits Times or go to straitstimes.com for more stories.