President, Congress Blink On Budget To Avoid Government Shutdown

In the end, someone blinked.

After a tumultuous week of tense budget negotiations and threats of shutting down the federal government, Congress and the President agreed to a budget deal to keep the lights on.

Details of the budget agreement will be hammered out and formally voted on next week in Congress. In short, the President and Democrats agreed to an estimated $38 billion in spending reductions, but saved EPA and Planned Parenthood funding targeted by Republicans for elimination.

The budget negotiations only solve the current year’s fiscal budget, which ends September 30. More heavy lifting will come as future budget planning is initiated.

From Politico:

Covering the last six months of this fiscal year ending Sept. 30, the agreement comes almost a full two months after the House first started the fight Feb 19 with a bill cutting $61.3 billion from spending levels at the beginning of this year and more than $100 billion from Obama’s initial budget request for 2011.

By comparison, the measure now would cut about $38 billion from this year’s spending and $78 billion from Obama’s budget – more than halfway toward the GOP in each case. But factoring in what will be a more than $4 billion increase for the Pentagon, the true cut for domestic and foreign aid programs is closer to $42 billion.

Within those confines, Obama locked in funding some of his top priorities including $700 million for “Race to the Top” education reforms and $7.6 billion for Head Start. And the administration successfully substituted billions in savings from mandatory spending programs to help relieve the pressure on discretionary appropriations.

Republicans had resisted this approach, but it paid extra dividends for Boehner in the case of reforms in the Pell Grant program to assist low income college students. The immediate savings in 2011 are about $500 million but in 2012, that could expand into a $6 billion cut from discretionary spending – the real political target for the GOP.

Altogether, the 2011 savings attributed to mandatory spending total about $17.8 billion.

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