WASHINGTON – The White House and congressional leaders reached a two-year budget deal overnight that would lift mandatory sequestration cuts on both defence and domestic spending and raise the federal debt ceiling, averting a fiscal standoff as the Republican-led US House of Representatives prepares for new leadership.
A White House official said on Tuesday the compromise deal would protect Social Security and Medicare beneficiaries from cuts and urged members of Congress from both parties to pass it.
“It’s a responsible agreement that is paid for in a balanced way by ensuring that hedge funds and private equity firms pay the taxes they owe and by cutting billions in wasteful spending,” the official said in a statement.
House Speaker John Boehner and other congressional leaders raced to finalise the deal, which included extending the debt ceiling until March 2017, on Monday night, before he transfers power to his expected successor, Paul Ryan.
As part of the deal, congressional leaders proposed to sell 58 million barrels of oil from US emergency reserves over six years starting in fiscal 2018 to help pay for an end to mandatory spending cuts, according to a copy of the bill posted to a congressional website.
If successful, the agreement would mark a final act for Boehner to clear some politically divisive legislation as Ryan takes over as speaker – assuming a majority of the House votes to put him in the top job in an election set for Thursday.
Boehner is to retire from Congress on Friday.
Central to the pact is the easing of across-the-board budget caps which would allow an additional $80 billion in spending over two years, split evenly between military and domestic programs. About $50 billion in added spending would come in fiscal 2016, which started on October 1, and $30 billion would be added to the fiscal 2017 budget.
“The bipartisan budget package unveiled last night represents real progress for hard-working families across the country,” House Democratic leader Nancy Pelosi said in a statement.
“At long last, we have broken the sequester’s stranglehold on our national defence and our investments in good-paying jobs and the future of America.”
By negotiating a two-year budget deal, congressional leaders and the White House may be acknowledging that they will not be able to craft a comprehensive, longer term deficit-reduction package during the remainder of Barack Obama’s presidency. (Reuters)
Senate Minority Leader Harry Reid and House Minority Leader Nancy Pelosi hold a news conference on the upcoming budget reforms and legislation on Capitol Hill in Washington, October 1, 2015. (Reuters)
