Federal shutdown avoided, 2012 budget fight looms

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(AP) - A last-minute budget deal forged amid blusterand tough bargaining averted an embarrassing federal shutdown, cutbillions in spending and provided the first major test of thedivided government that voters ushered in five months ago.

Working late into Friday night, congressional and White Housenegotiators finally agreed on a plan to pay for governmentoperations through the end of September while trimming $38.5billion in spending.

Lawmakers then approved a measure to keep the government runningthrough next Friday while the details of the new spending plan arewritten into legislation.

Obama signed the short-term measure without fanfare Saturday.Congressional approval of the actual deal is expected in the middleof next week.

"Americans of different beliefs came together again,"President Barack Obama said from the White House Blue Room, asetting chosen to offer a clear view of the Washington Monumentover his right shoulder.

The agreement was negotiated by Obama, House Speaker JohnBoehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. Theadministration was poised to shutter federal services, fromnational parks to tax-season help centers, and to send furloughnotices to hundreds of thousands of federal workers.

All sides insisted they wanted to avoid that outcome, which attimes seemed inevitable.

Shortly after midnight, White House budget director Jacob Lewissued a memo instructing departments and agencies to continuenormal operations.

Boehner said the deal came after "a lot of discussion and along fight." He won an ovation from his rank and file, includingthe new tea party adherents whose victories last November shiftedcontrol of the House to the GOP.

Reid declared the deal "historic."

The deal marked the end of a three-way clash of wills. It alsoset the tone for coming confrontations over raising thegovernment's borrowing limit, the spending plan for the budget yearthat begins Oct. 1 and long-term deficit reduction.

In the end, all sides claimed victory.

For Republicans, it was the sheer size of the spending cuts. ForObama and Reid, it was casting aside GOP policy initiatives thatwould have blocked environmental rules and changed a program thatprovides family planning services.

Not all policy provisions were struck.

One in the final deal would ban the use of federal or localgovernment funds to pay for abortions in the District of Columbia.A program dear to Boehner that lets District of Columbia studentsuse federally funded vouchers to attend private schools alsosurvived.

Republicans had included language to deny federal money to putin place Obama's year-old health care law. The deal only requiressuch a proposal to be voted on by the Democratic-controlled Senate,where it is certain to fall short of the necessary 60 votes.

The deal came together after six grueling weeks as negotiatorsvirtually dared each other to shut down the government.

Boehner faced pressure from his GOP colleagues to stick asclosely possible to the $61 billion in cuts and the conservativepolicy positions that the House had passed.

The accomplishment set the stage for even tougherconfrontations.

House Republicans intend to pass a 2012 budget in the comingweek that calls for sweeping changes in the Medicare and Medicaidhealth programs and even deeper cuts in domestic programs to gaincontrol over soaring deficits.

In the Republican radio address, House Budget Committee ChairmanPaul Ryan, R-Wis., warned of a coming crisis.

"Unless we act soon, government spending on health andretirement programs will crowd out spending on everything else,including national security. It will literally take every cent ofevery federal tax dollar just to pay for these programs," Ryansaid Saturday.

That debate could come soon.

The Treasury has told Congress it must vote to raise the debtlimit by summer. Republicans hope to use this issue to force Obamato accept long-term deficit-reduction measures.

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