Showdown But No Shutdown

April 9, 2011  |  

(Wall Street Journal) — Congressional leaders reached a last-gasp agreement Friday to avert a shutdown of the federal government, after days of haggling and tense hours of brinksmanship.  Word of the deal came just an hour before a midnight deadline, as House Speaker John Boehner (R., Ohio), Senate Majority Leader Harry Reid (D., Nev.) and President Barack Obama made separate appearances before TV cameras to hail what they said were its historically large budget cuts.

Under the deal, the GOP won budget cuts of $39 billion for the remaining six months of the fiscal year, far more than either party had expected a few months ago. Democrats managed to hold off Republican demands to strip funding for the new health-care law and for a range of other Democratic priorities. GOP provisions to cut all federal funding to Planned Parenthood of America and National Public Radio also were dropped.  Also in the deal is a provision requiring an annual audit of the new Consumer Financial Protection Bureau, which had been created by last year’s Dodd-Frank financial overhaul law. Republicans have been widely critical of the law.

The budget battle was the first big standoff in the new Washington power structure created by November’s midterm election, in which Republicans seized control of the House on a surge of voter complaints about government spending. As bitter as the weekslong fight was, it served merely as a warm-up for bigger and more consequential battles to come. Some Republicans say they will vote against raising the federal debt ceiling in a few weeks unless it is accompanied by a plan to rein in deficits. In addition the GOP has laid out cuts and proposals in its budget plan for the next fiscal year that dwarf the deal struck Friday in scope and size.

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