It was literally an 11th- hour deal. Shortly after 11pm here United States President Obama, looking tired but happy, took to the podium in the White House to announce that after an entire week of feverish negotiations between Democrats and Republicans a bipartisan deal had been hammered to cut $38 billion from the 2010 baseline budget, thereby averting an automatic shutdown of the federal government.
The constitutionally-mandated shutdown, which was set to occur at midnight eastern standard time, appeared imminent throughout the day, and over 800,000 federal government employees, including U.S. soldiers serving abroad, were preparing to see their paycheques dry up.
With intense discussions underway through the week between Mr. Obama, Speaker of House of Representatives, Republican John Boehner, and Senate Majority Leader Harry Reid, the final rounds of negotiation were said to have come down to deeply divisive social issues such as federal government funding of abortion, cuts to mandatory expenditure programmes such as Medicare and Medicaid and financing for environmental programmes aimed at cutting greenhouse gas emissions.
Earlier in the week Mr. Obama had said that Democrats had been willing to meet Republicans halfway on the actual quantity of budget cuts, in particular arguing that he agreed to a “haircut” of $73 billion from his 2011 budget proposals.
Yet he said at a media briefing that what he did not want were cuts to vital investments in education, innovation and the environment, which would make it possible for the U.S. to emerge safely from the economic downturn and be globally competitive in the future.
Democrats are likely, however, to have compromised on some of their core policy priorities, as the President announced last night, “Some of the cuts we agreed to will be painful. Programmes people rely on will be cut back. Needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances.”
He was clearly pleased, nevertheless, that the shutdown had been averted, and said, “Behind me, through the window, you can see the Washington Monument, visited each year by hundreds of thousands from around the world... Tomorrow, I am pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business.”
Similar to a tax-cut deal for the middle class that Congress and the White House agreed in January, there was a clamour of bipartisan support for the deal bashed out on Capitol Hill last night.
Mr. Boehner, Republican of Ohio, said that he would expect the final vote on the deal to occur towards the middle of next week, adding, “This has been a long discussion and a long fight, but we fought to keep government spending down because it really will, in fact, help create a better environment for job creators in our country.”
Mr. Reid, Democrat of Nevada, said in a statement to the Senate, “This is historic, what we have done,” touching upon what was described as “the biggest annual spending cut in history.”
The goal of cutting the U.S.’ spiralling budget deficit has principally been driven through Congress by pressure from a new crop of fiscally conservative Tea Party members, who seized control of the House during the mid-term elections last November.
