Budget Showdown 2011: Obama, Boehner and Reid Strike Last Minute Budget Deal — Averting Government Shutdown with 38 Billion in Cuts

POLITICAL HIGHLIGHTS

By Bonnie K. Goodman

Ms. Goodman is the Editor of History Musings. She has a BA in History & Art History & a Masters in Library and Information Studies from McGill University, and has done graduate work in history at Concordia University.

OBAMA PRESIDENCY & THE 112TH CONGRESS:

President Barack Obama makes a statement on the budget agreement
White House Photo, Pete Souza, 4/8/11

IN FOCUS

  • Federal Budget (2011) — Government Shutdown AvertedNYT
  • Details of the Bipartisan Budget Deal: Last night, President Obama announced that the federal government will remain open for business because Americans from different beliefs came together, put politics aside, and met the expectations of the American people. Today, small businesses will no longer worry or have to wait on a loan to open or expand their business, families will receive the mortgages they applied for, and hundreds of thousands of government workers, including our brave men and women in uniform, will continue to receive paychecks on time.
    This deal cuts spending by $78.5 billion from the President’s FY 2011 Budget request — the largest annual spending cut in our history. These are real cuts that will save taxpayers money and have a real impact. Many will be painful, and are to programs that we support, but the fiscal situation is such that we have to act…. – WH, 4-9-11
  • Congress reaches an 11th-hour budget deal, still must vote to avoid shutdown: Republicans and Democrats on Capitol Hill have reached an agreement to fund the federal government for the next five months, Senate Majority Leader Harry Reid’s office announced Friday night. The deal will include $39 billion in spending cuts and will drop language related to Planned Parenthood. Lawmakers were still working to approve a short-term stopgap funding bill before midnight to give them time to craft the longer-term legislation.
  • Boehner Says Budget Deal Said to Be Reached to Avoid Government Shutdown: Lawmakers reached a deal just minutes before a deadline that would have shuttered federal facilities and furloughed thousands of workers, House Speaker John A. Boehner said.
    Hours from a government shutdown, leaders of the House and Senate offered dramatically different reasons for a budget stalemate and expressed little hope that the two sides would reach an agreement by midnight…. – NYT, 4-8-11

STATS & POLLS

  • Budget fight shows Washington still broken: As the midnight Friday deadline loomed for a possible government shutdown, and politicians continued their rhetorical war of words, a larger message went out to the rest of the country: Washington is still broken. The deal announced less than 90 minutes before the deadline may produce a sense of relief that the government will remain open. But given the tortured negotiations and the claims and counterclaims that were traded all day, the public is likely to find fault with both political parties.
    Public sentiment has been clear for weeks. Overall, the country prefers compromise to confrontation, stalemate and shutdown, according to the polls… – WaPo, 4-8-11

THE HEADLINES….

Philip Scott Andrews/The New York Times
The House speaker, John A. Boehner, announced the federal budget agreement reached Friday night by Congressional leaders.

 

  • Federal shutdown avoided, 2012 budget fight looms: A last-minute budget deal forged amid bluster and tough bargaining averted an embarrassing federal shutdown, cut billions in spending and provided the first major test of the divided government that voters ushered in five months ago.
    Working late into Friday night, congressional and White House negotiators finally agreed on a plan to pay for government operations through the end of September while trimming $38.5 billion in spending. Lawmakers then approved a measure to keep the government running through next Friday while the details of the new spending plan are written into legislation.
    Obama signed the short-term measure without fanfare Saturday. Congressional approval of the actual deal is expected in the middle of next week. “Americans of different beliefs came together again,” President Barack Obama said from the White House Blue Room, a setting chosen to offer a clear view of the Washington Monument over his right shoulder.
    The agreement was negotiated by Obama, House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. The administration was poised to shutter federal services, from national parks to tax-season help centers, and to send furlough notices to hundreds of thousands of federal workers… – AP, 4-9-11
  • Long meetings, dashed hopes _ but finally a deal: There was barely an hour left before the midnight padlocking of government doors. In a Capitol basement meeting room, House Speaker John Boehner was telling exhausted fellow Republicans that a deal to avert a shutdown was nearly finished when an aide alerted him that staff had completed the final details and the agreement was complete.
    “He said we don’t have the Senate and we don’t have the White House, and it’s a good day’s work,” said Rep. Jack Kingston, R-Ga., who was in the closed-door session and later described the scene. And with that, Republicans clapped: “Not euphoria,” Kingston said, reflecting fatigue and the realization of a long year of intense budget battling lay ahead. But for now, a week of top-level White House meetings, round-the-clock bargaining by staff and lots of emotional hills and valleys had produced a bipartisan accord to trim $38.5 billion in spending over this fiscal year’s remaining six months and head off a federal shutdown that both parties feared could hurt their standing with voters…. – AP, 4-9-11
  • Analysis: GOP won first round of budget battle: Republican conservatives were the chief winners in the budget deal that forced Democrats to accept historic spending cuts they strongly opposed. Emboldened by last fall’s election victories, fiscal conservatives have changed the debate in Washington. The question no longer is whether to cut spending, but how deeply. Rarely mentioned is the idea of higher taxes to lower the deficit. Their success is all the more notable because Democrats control the Senate and White House…. – AP, 4-9-11
  • Budget deal avoids shutdown, fight ahead: President Barack Obama signed a short-term spending bill on Saturday that averted a government shutdown, formalizing a compromise deal with Republicans that paves the way for more — and bigger — deficit-reduction fights to come. With just over an hour to spare before a midnight deadline, Obama’s Democrats and opposition Republicans agreed on Friday to a budget compromise that will cut about $38 billion in spending for the last six months of this fiscal year.
    After signing the stopgap spending bill to keep the federal government running until the deal can be formally approved in the coming days, Obama underscored the fact that Washington was open with a surprise visit to the Lincoln Memorial. “I just wanted to say … that because Congress was able to settle its difference, that’s why this place is open today and everybody’s able to enjoy their visit,” he told cheering tourists from the monument steps…. – Reuters, 4-9-11
  • Obama signs bill averting government shutdown: The short-term spending bill was passed overnight by both houses of Congress and keeps the government operating until Friday. Its signing was announced in a news release, in contrast to the dramatics earlier this week…. – LAT, 4-9-11
  • Obama at Lincoln Memorial, open after budget deal: President Barack Obama made the short trip from the White House to the Lincoln Memorial on Saturday to make clear that the country’s national parks and monuments are open for business. A deal Friday night between the White House and congressional leaders avoided a government shutdown that would have closed popular tourist sites across the country.
    The president greeted surprised tourists and told them, “Because Congress was able to settle its differences, that’s why this place is open today and everybody’s able to enjoy their visit.” “That’s the kind of future cooperation I hope we have going forward,” the president said…. – AP, 4-9-11
  • Next on the Agenda for Washington: Fight Over Debt: The down-to-the-wire partisan struggle over cuts to this year’s federal budget has intensified concern in Washington, on Wall Street and among economists about the more consequential clash coming over increasing the government’s borrowing limit. Congressional Republicans are vowing that before they will agree to raise the current $14.25 trillion federal debt ceiling — a step that will become necessary in as little as five weeks — President Obama and Senate Democrats will have to agree to far deeper spending cuts for next year and beyond than those contained in the six-month budget deal agreed to late Friday night that cut $38 billion and averted a government shutdown. Republicans have also signaled that they will again demand fundamental changes in policy on health care, the environment, abortion rights and more, as the price of their support for raising the debt ceiling. In a letter last week, Treasury Secretary Timothy F. Geithner told Congressional leaders the government would hit the limit no later than May 16. He outlined “extraordinary measures” — essentially moving money among federal accounts — that could buy time until July 8…. – NYT, 4-9-11
  • Tea Party revels in newfound clout: ‘When we;re cutting, we’re winning': Americans learned yesterday the full power of the Tea Party, with newly elected conservatives calling the shots in the House rather than railing against government from the sidelines. For many in the movement, pushing the government to the brink of closure was a crowning achievement, an emphatic statement that spending must be reined in — and now. “When we’re cutting,” said Representative Nan Hayworth, a New York Republican, “we’re winning.” “It’s a victory for the American people,” declared Representative Allen West, Republican of Florida. “When you look at what has happened over the past few years — where we’ve had these astronomical debt and deficits — it’s amazing how we’re actually having a conversation in Washington, D.C., about spending cuts.”
    But for those outside the movement, it put on full display the uncompromising principles of the far right, showing that Tea Party-aligned lawmakers are so ideologically rigid they will throw sand into the gears of government to prove their point. Democrats questioned why conservatives who campaigned on creating jobs were so eager to furlough 800,000 government employees and freeze their paychecks. “The Tea Party is trying to sneak through its extreme social agenda,” Harry Reid, the Senate majority leader, said yesterday…. – Boston Globe, 4-9-11
  • Budget Deal to Cut $38 Billion Averts Shutdown: Congressional leaders and President Obama headed off a shutdown of the government with less than two hours to spare Friday night under a tentative budget deal that would cut $38 billion from federal spending this year. President Obama praised the budget deal in short remarks from the Blue Room in the White House just after 11 p.m.
    Speaker John A. Boehner, who had pressed Democrats for cuts sought by members of the conservative new House majority, presented the package of widespread spending reductions and policy provisions and won a positive response from his rank and file shortly before 11 p.m. Both Democrats and Republicans proclaimed they had reached a deal and would begin the necessary steps to pass the bill and send it to Mr. Obama next week…. – NYT, 4-9-11
  • Historic’ deal to avoid government shutdown: Perilously close to a government shutdown, President Barack Obama and congressional leaders reached a historic agreement late Friday night to cut about $38 billion in spending and avert the first federal closure in 15 years. Obama hailed the deal as “the biggest annual spending cut in history.” House Speaker John Boehner said that over the next decade it would cut government spending by $500 billion — and won an ovation from his rank and file, tea party adherents among them. “This is historic, what we’ve done,” agreed Senate Majority Leader Harry Reid, D-Nev., the third man involved in negotiations that ratified a new era of divided government…. – AP, 4-8-11
  • US House Republicans told of $39 bln spending plan: U.S. House of Representatives Republican leaders on Friday presented to their membership a $39 billion spending cut plan aimed at averting a government shutdown, according to Republican lawmakers. The House is also planning to vote later tonight on a stopgap funding bill to keep the government running until the longer budget plan can be enacted into law sometime next week, the lawmakers said…. – Reuters, 4-8-11

QUOTES

President Obama records the weekly address
White House Photo, Pete Souza, 4/8/11
  • Barack Obama: Last night, leaders of both parties came together to avert a government shutdown, cut spending, and invest in our future. This is good news for the American people. It means that small businesses can get the loans they need, and hundreds of thousands of Americans will get their paychecks on time—including our brave men and women in uniform… -
  • Weekly Address: President Obama on the Budget Compromise to Avoid a Government Shutdown: Last night, after weeks of long and difficult negotiations over our national budget, leaders of both parties came together to avert a government shutdown, cut spending, and invest in our future.
    This is good news for the American people. It means that small businesses can get the loans they need, our families can get the mortgages they applied for, folks can visit our national parks and museums, and hundreds of thousands of Americans will get their paychecks on time – including our brave men and women in uniform.
    This is an agreement to invest in our country’s future while making the largest annual spending cut in our history. Like any compromise, this required everyone to give ground on issues that were important to them. I certainly did. Some of the cuts we agreed to will be painful – programs people rely on will be cut back; needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances. But we also prevented this important debate from being overtaken by politics and unrelated disagreements on social issues. And beginning to live within our means is the only way to protect the investments that will help America compete for new jobs – investments in our kids’ education and student loans; in clean energy and life-saving medical research.
    Reducing spending while still investing in the future is just common sense. That’s what families do in tough times. They sacrifice where they can, even if it’s hard, to afford what’s really important.
    A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground. Now, the same cooperation has made it possible for us to move forward with the biggest annual spending cut in history. And it’s my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead – from creating jobs and growing our economy to educating our children and reducing our long-term deficits.
    That’s our responsibility. That’s what the American people expect us to do. And it’s what the American people deserve. – WH, 4-9-11
  • President Obama’s Statement on the Bipartisan Agreement on the Budget: REMARKS BY THE PRESIDENT ON THE BUDGET 11:04 P.M. EDT: THE PRESIDENT: Good evening. Behind me, through the window, you can see the Washington Monument, visited each year by hundreds of thousands from around the world. The people who travel here come to learn about our history and to be inspired by the example of our democracy — a place where citizens of different backgrounds and beliefs can still come together as one nation.
    Tomorrow, I’m pleased to announce that the Washington Monument, as well as the entire federal government, will be open for business. And that’s because today Americans of different beliefs came together again.
    In the final hours before our government would have been forced to shut down, leaders in both parties reached an agreement that will allow our small businesses to get the loans they need, our families to get the mortgages they applied for, and hundreds of thousands of Americans to show up at work and take home their paychecks on time, including our brave men and women in uniform.
    This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history. Like any worthwhile compromise, both sides had to make tough decisions and give ground on issues that were important to them. And I certainly did that.
    Some of the cuts we agreed to will be painful. Programs people rely on will be cut back. Needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances.
    But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs — investments in our kids’ education and student loans; in clean energy and life-saving medical research. We protected the investments we need to win the future.
    At the same time, we also made sure that at the end of the day, this was a debate about spending cuts, not social issues like women’s health and the protection of our air and water. These are important issues that deserve discussion, just not during a debate about our budget.
    I want to think Speaker Boehner and Senator Reid for their leadership and their dedication during this process. A few months ago, I was able to sign a tax cut for American families because both parties worked through their differences and found common ground. Now the same cooperation will make possible the biggest annual spending cut in history, and it’s my sincere hope that we can continue to come together as we face the many difficult challenges that lie ahead, from creating jobs and growing our economy to educating our children and reducing our deficit. That’s what the American people expect us to do. That’s why they sent us here…. – WH, 4-8-11TranscriptMp4Mp3
  • Democrats, Republicans agree on a budget deal: “We have agreed to an historic amount of cuts for the remainder of this fiscal year, as well as a short-term bridge that will give us time to avoid a shutdown while we get that agreement through both houses and to the President. We will cut $78.5 billion below the President’s 2011 budget proposal, and we have reached an agreement on the policy riders. In the meantime, we will pass a short-term resolution to keep the government running through Thursday. That short-term bridge will cut the first $2 billion of the total savings,” Senate Majority Leader Harry Reid and House Speaker John Boehner said in a joint statement issued after the agreement. – CNN, 4-8-11
  • Speaker of the House of Representatives John A. Boehner: This has been a lot of 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.
  • U.S. Senate Republican Leader Mitch McConnell Welcomes Historic Spending Reductions: Let me thank my friend the Majority Leader and Speaker Boehner for their outstanding work during this difficult negotiation. You know, Mr. President, we had an opportunity tonight to decide whether we wanted to repeat history, or make history. Had we chosen to repeat history, we would have allowed a government shutdown. Instead we decided to make history by implementing in the middle of this fiscal year as the Majority Leader has indicated substantial reductions in spending.
    Now, these reductions, Mr. President, are in the billions. Once we get through this process by the end of next week, we will move on to a much larger discussion about how we save trillions, by enacting hopefully on a bipartisan basis a budget that genuinely begins to get on top of this problem. And the problem as we all know is $14 trillion in debt, and over $53 trillion in unfunded liabilities. The President has asked us to raise the debt ceiling. And Senate Republicans and House Republicans and I hope many Democrats as well are going to say, Mr. President, in order to raise the debt ceiling, we need to do something significant about the debt. My definition of significant is that the markets view it as significant, the American people view it as significant and foreign countries view it as significant.
    So for tonight, again, I congratulate the Majority Leader and the Speaker. This is an important first step, but just the beginning of what we need to do to get our house, our fiscal house, in order. -

HISTORIANS & ANALYSTS’ COMMENTS

Gallery: Government shutdown 2011: Congressional leaders agreed late Friday to a compromise that will keep the federal government funded for the remainder of the fiscal year.

  • Gary Jacobson, Julian Zelizer: Obama Calls Budget Deal a ‘Worthwhile Compromise': “The size of the cuts is a bit more than Democrats would like, but on the other hand, the riders are generally gone,” said Gary Jacobson, a political science professor at the University of California at San Diego. “So it’s something that might be generally popular and help both sides. Most Americans wanted some sort of compromise.”
    Julian Zelizer, a professor of history and public affairs at Princeton University in New Jersey, said Obama may face questions about whether he engaged in the negotiations soon enough. “All and all, this is something he survives rather than a negotiation that remakes how the electorate thinks about him,” Zelizer said. Bloomberg, 4-9-11
  • JEFF ZELENY: In Budget Deal, Signs of Obama’s Path to the Middle: President Obama opened the week by calling on Democrats to embrace his re-election campaign. He closed it by praising Republicans for forging a compromise to cut spending this year and avert a government shutdown. The juxtaposition made clearer than ever the more centrist governing style Mr. Obama has adopted since his party’s big losses in November and his recapture-the-middle strategy for winning a second term.
    But in agreeing Friday night to what he called the largest annual spending cut in the nation’s history, the president further decoupled himself from his party in Congress, exacerbating concerns among some Democrats about whether he is really one of them and is willing to spend political capital to defend their principles on bigger battles ahead…. – NYT, 4-9-11
  • 2011 is not 1995: The substance of this deal is bad. But the way Democrats are selling it makes it much, much worse. The final compromise was $38.5 billion below 2010’s funding levels. That’s $78.5 billion below President Obama’s original budget proposal, which would’ve added $40 billion to 2010’s funding levels, and $6.5 billion below John Boehner’s original counteroffer, which would’ve subtracted $32 billion from 2010’s budget totals. In the end, the real negotiation was not between the Republicans and the Democrats, or even the Republicans and the White House. It was between John Boehner and the conservative wing of his party. And once that became clear, it turned out that Boehner’s original offer wasn’t even in the middle. It was slightly center-left…. – WaPo, 4-9-11
  • The Shutdown That Wasn’t: Given the widespread consensus that the political consequences of a shutdown would be much worse for the Republicans than for the Democrats, there’s a case to be made that Reid and Obama would have been better off taking a much harder line, and then just sitting back and chuckling as the Tea Party caucus pushed an unwilling Boehner off the plank.
    So why didn’t they? Well, maybe they put country before party, and calculated that shutting down the government over what amounts to a fraction of a fraction of a vast federal budget would be horribly irresponsible, even if it made liberals happy and redounded to the Democratic Party’s short-term benefit. If so, good for them. – NYT, 4-9-11
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