Congress Leaders Agree on Stopgap U.S. Spending Plan

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Senate Majority Leader U.S. Sen. Harry Reid and Sen. Charles Schumer at a news conference July 26, 2012 on Capitol Hill. Close

Senate Majority Leader U.S. Sen. Harry Reid and Sen. Charles Schumer at a news... Read More

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Photographer: Alex Wong/Getty Images

Senate Majority Leader U.S. Sen. Harry Reid and Sen. Charles Schumer at a news conference July 26, 2012 on Capitol Hill.

An agreement reached by congressional leaders and President Barack Obama to fund the U.S. government through March will give lawmakers time to debate $607 billion in spending cuts and tax increases scheduled to start in January.

The House and Senate haven’t come up with a plan to avert the spending cuts, which total $1.2 trillion over 10 years. Unless Congress acts, the George W. Bush-era tax cuts and other tax breaks will expire Dec. 31.

Congressional leaders said yesterday they will vote in September on a $1.047 trillion, six-month stopgap measure that would keep the government operating after the start of the fiscal year on Oct. 1. The funding level is consistent with an August 2011 law that raised the federal debt ceiling.

“This agreement reached between the Senate, the House and the White House provides stability for the coming months, when we will have to resolve critical issues that directly affect middle-class families,” Senate Majority Leader Harry Reid, a Nevada Democrat, told reporters yesterday.

Reid said the measure won’t contain unrelated policy items that have held up passage of spending bills in the past.

‘Welcome Development’

White House Press Secretary Jay Carney said in a statement that the agreement announced yesterday was “a welcome development,” adding that the White House was “encouraged that both sides have agreed to resolve this issue without delay.”

House Democratic Whip Steny Hoyer of Maryland said today that Republicans agreed to the six-month spending deal because “they didn’t want to show their hand prior to the election” about the “draconian” spending cuts they would eventually propose.

That’s why House Republicans won’t offer a spending measure for health programs that would eliminate a family planning program, cut a variety of children’s health programs and won’t finance implementation of the 2010 health care law, Hoyer told reporters.

Republicans made a “purely political judgment” that a confrontation over spending cuts that might “‘put at risk the operations of the government would be politically damaging,’’ he said. Hoyer didn’t say how Democrats would benefit from the agreement.

More Information

Shortly after the deal was announced, Senate Minority Leader Mitch McConnell, a Kentucky Republican, called on Obama to provide lawmakers with more information about how the automatic cuts would be implemented and what their effects would be.

‘‘We think more information, sooner, is better, and then we could make an intelligent and well-informed decision about whether it’s really important to act sooner rather than later this year,” McConnell said.

The Republican-led House and the Democratic-led Senate need a stopgap measure, known as a continuing resolution, because Congress hasn’t agreed on any spending bills for the 2013 fiscal year that begins Oct. 1.

Senate leaders have pressed for the $1.047 trillion funding level. House Republicans dropped their demands for reduced spending that amounted to an additional $19 billion in cuts in discretionary spending.

Six-Month Measure

Representative Jeff Duncan, a South Carolina Republican, said yesterday he wanted a six-month spending measure “to put the funding of government into the 100 days” of Republican presidential candidate Mitt Romney’s administration if he wins in November.

Duncan, a member of the Republican Study Committee that supports limited government, said he and other Republicans would back the stopgap measure only if “it didn’t have a whole lot of other monkey business tied to it.”

“Anything shorter than six months I would not support,” he said.

Dick Durbin of Illinois, the second-ranking Democrat in the Senate, said the agreement would avert “another threatened government shutdown from the Republicans.”

Some of the lawmakers who write the annual spending bills criticized the stopgap measure.

“Agreeing to put the government on autopilot for six months is no great achievement,” Senator Thad Cochran of Mississippi, the top Republican on the Senate Appropriations Committee, said in a statement. “It simply means more drift. It means a longer period of uncertainty for government agencies and the people they serve.”

To contact the reporters on this story: Kathleen Hunter in Washington at khunter9@bloomberg.net; Roxana Tiron in Washington at rtiron@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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