[ 2011-04-09 ]

Barack Obama

US Congress agrees last-minute budget deal
Republicans and Democrats have reached a deal on
the US budget, an hour before a deadline that
would have forced the government to close many
services.

They have passed a stop-gap spending bill which
will allow the government to keep running while
the wider budget plan is finalised.

The parties have agreed to slash about $38bn
(£23bn) from spending for the year until 30
September.

President Barack Obama said the cuts would be
difficult but necessary.

"Some of the cuts we agreed to will be painful,"
he said.

"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 said it was the "the biggest annual spending
cut in history", but said America needed to start
living within its means.

The BBC's Mark Mardell in Washington says Mr Obama
has put a gloss on the measures, but they are a
victory for the Republicans.

Our correspondent says the battles yet to come
over the 2012 budget and long-term plans to cut
the deficit are likely to be much more difficult.

Announcing the deal, House Speaker John Boehner, a
leading Republican, said it had been a "long
fight".

"We fought to keep government spending down
because it really will create a better situation
for job creators," he said.

Without an agreement by midnight on Friday, the
government would have been forced to shut down,
barring some 800,000 government employees from
working.

The last US government shutdown came in 1995 amid
a dispute between the Republican Congress and
Democratic President Bill Clinton's White House.

The shutdown lasted for 20 days and was estimated
to have shaved one percentage point off US
economic growth for one quarter of the year.

During the current stand-off, talks were stalled
for days as Republicans - urged on by the fiscally
conservative Tea Party movement - pushed for
larger budget cuts than Democrats were willing to
concede.

Source - BBC

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