WASHINGTON: The US Senate has approved a budget deal that avoids a potentially drastic debt default.
The bill passed the House of Representatives earlier this week and now goes to Obama, who said he would sign it as soon as it arrives on his desk. The measure, which passed 64 votes to 35 in the dead of night, provides lawmakers with some fiscal breathing room through the 2016 presidential election after years of bruising spending fights.
The plan suspends the statutory federal borrowing cap until mid-March 2017 and averts a damaging default. It provides for a $50 billion spending increase in fiscal 2016 – split about equally between defense and domestic programs – and $30 billion in fiscal 2017.
The deal also adds $31 billion into an emergency war fund for the Pentagon, offset by tweaks to some entitlement programs. “It will keep us safe by investing in our national security” and protects seniors by avoiding deep cuts to Medicare public health care and the Social Security pension system, Obama said in a statement, applauding Democrats and Republicans who “came together” to pass the budget agreement.
“It locks in two years of funding and should help break the cycle of shutdowns and manufactured crises that have harmed our economy,” he added. Republican and Democratic lawmakers fought several battles over borrowings between 2011 and 2014 that roiled financial markets, caused an unprecedented downgrade of the country’s triple-A debt rating by Standard & Poor’s, and forced a partial government shutdown for 16 days in 2013.
The deal is the result of weeks of secret negotiations between the White House and just-departed Republican speaker of the House John Boehner, who sought to clear the decks of any fiscal crises before his successor took the gavel.
Boehner stepped down Thursday, when congressman Paul Ryan was elected as the new speaker, and the bill marked Boehner’s final legislative achievement. There was a sense of urgency to the Senate vote, which occurred hours before sunrise Friday.
The Republican-controlled Congress needed to raise the federal borrowing limit by November 3 to avoid risking a crippling default on the national debt. Overall, the new budget would set 2016 discretionary spending at $1.067 trillion, of which about half is for defense. The figure would rise slightly in 2017, to $1.071 trillion.
Congressional appropriators will need to decide how the funds will be divided among the vast slate of federal programs by December 11, when a stopgap spending measure expires. Obama urged Congress to pass those spending bills “without getting sidetracked by ideological provisions that have no place in America’s budget process.”
His message appeared aimed at conservative lawmakers who this year said they would risk the threat of a government shutdown if the administration would not agree to defund Planned Parenthood, the large non-profit women’s health provider whose services include abortions.
Republican presidential nomination, have blasted the deal as fiscal recklessness. Critics say it marks a sell-out to the Obama administration because it busts through congressionally mandated spending caps and extends borrowing authority, while doing little to pare down the nation’s $18 trillion deficit.
“Republican majorities have just given President Obama a diamond-encrusted, glow-in-the-dark AmEx card,” Senator Ted Cruz, who is running for president, fumed late Thursday as he excoriated his own party’s leadership.
Senator Rand Paul, another Republican presidential hopeful, accused lawmakers from both parties of having “come together in an unholy alliance to explode the debt.” “The left gets more welfare, the right gets more military contracts, and the taxpayer is stuck with the bill,” Paul said in a one-hour, 1:30 am floor speech attacking the deal.
