Budget Deal Reached

Written by FrumForum News on Friday April 8, 2011

Politico reports:

After a long day of trading offers, the White House and House Republicans reached agreement Friday night on a budget framework that would cap 2011 appropriations near or below $1.050 trillion while cutting domestic and foreign aid by more than $40 billion from the rate of spending at the beginning of this Congress.

Behind the closed doors of special meeting of the Republican Conference, Speaker John Boehner presented the package to his party as at least an agreement in principle and said at one point: “We have a deal.” The Senate should now feel confident enough to move ahead with a stop gap spending bill to avert—or at least shorten—any shutdown beginning at midnight.

In a joint statement with Senate Majority Leader Harry Reid Friday night, Boehner announced: “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.”

Speaking on national television with the Washington Monument as a backdrop, President Barack Obama announced the deal shortly after 11 p.m.

Boehner made a final bid at getting a still lower top line directly to Obama, when the president called him in the early evening. A second key variable is Pentagon spending, where Democrats had moved up to $514 billion –a $5.3 billion increase— but were also asking for an across-the-board government-wide percentage cut that would not exempt defense.

Aides on both sides were cautiously optimistic after so many twists-and-turns in the talks. With a deal reached, the plan calls for House and Senate Appropriations Committee clerks to immediately begin writing a bill this weekend from the revised spending allocations.

To buy time for this work—as well as floor consideration in the House and Senate—a one week continuing resolution was being prepared in the Senate. But agreement would be needed before any such attempt is made.

In the case of defense spending, GOP leaders are fearful that if the final Pentagon number is too low, they will lose the votes of House Armed Services Committee Republicans needed to enact the final deal. Yet for Democrats, pumping up defense shifts the burden of the spending cuts even more onto domestic programs important to the party.

Indeed, for all the focus on the spending top-line, these tradeoffs can be just as important since the Republican battle-cry has always been to rollback domestic appropriations to the 2008 levels at the end of the Bush Administration.

Boehner, for example, still wants to get the net cut—now expected to be near $38 billion to $39 billion- as close as possible to $40 billion But in truth, the $1.050 trillion target already accepted by Democrats will require an estimated $42 billion-plus cut from non-defense spending to make room for the increased allowed for defense above 2010 spending.

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