FACTBOX-Details of deal reached to keep US government running

April 9 (Reuters) – Republicans and Democrats in the U.S.
Congress clinched a short-term budget deal to keep the federal
government running for a week after hammering out an agreement
to cut domestic spending.

The U.S. Senate passed the stopgap spending bill before
midnight on Friday, followed by approval in the U.S. House of
Representatives just after the midnight deadline.

But White House Budget Director Jack Lew told federal
agencies to continue normal operations, noting that President
Barack Obama was expected to sign the bill into law on
Saturday.

House Speaker John Boehner said he expected Congress to
vote by the middle of next week on a longer-term agreement that
includes the largest domestic spending cuts in U.S. history.

KEY DETAILS

The short-term measure cuts nearly $2 billion in spending
from transportation and housing programs, including $1.5
billion from a high-speed rail program and $280 million from
capital investment grants.

The longer-term agreement will cut spending in the current
2011 fiscal year by about $38 billion, including $17.8 billion
from benefit programs, or “entitlements,” lawmakers said.

The rest would come from so-called discretionary spending,
including a cut of $3 billion from defense programs, according
to House Appropriations Committee Chairman Mike Rogers.

Changes in mandatory spending, or “CHIMPs” in
Washington-speak, minimize the impact of the spending cuts in
future budget cycles because they do not lower the baseline
levels for discretionary programs such as space exploration or
housing, whose funding levels are set by Congress each year.

The package of cuts falls short of the $61 billion that
Republicans passed through the House in February, but it is
still above the original proposal they advanced in January.

Measured another way, the longer-term agreement cuts $78.5
billion from the budget proposal submitted by Obama to Congress
a year ago for the current fiscal year, which began on Oct. 1.

KEY AREA OF CONTROVERSY

The budget fight has been waged over the 14 percent slice
that Congress approves each year for domestic spending.

Most of the federal budget is beyond the reach of the
annual budget process. The size of benefit programs such as
Social Security is determined by how many people qualify for
them, not by how much money Congress sets aside for them.

Democrats pushed for cuts from mandatory programs, although
they exempted the Big Three — Social Security, the Medicare
health plan for retirees, and the Medicaid plan for the poor.

The largest of the remaining entitlement programs: $4.9
billion from a Justice Department fund for crime victims; $400
million from a fund to seize assets from organized crime; and
roughly $550 million from the SMART Grant student-aid program.

Republicans wanted most of the cuts to come from
discretionary programs that Congress reviews annually, because
that would set a lower baseline for spending in future years.

MOST POLICY RESTRICTIONS BLOCKED

The package does not contain the most divisive policy
“riders,” or restrictions, that Republicans wanted: measures to
ban funding for birth control and greenhouse-gas regulation.

Republicans had sought to block birth control funding to
the Planned Parenthood family planning organization, because it
also provides abortions, though not with public money.

That provision is not included. Instead, the Senate will
vote on it separately, but the measure is not expected to get
the 60 votes needed for passage.

The bill did include one policy rider: school vouchers for
the District of Columbia, a pet project of Boehner’s, according
to congressional aides.

It also bans the use of local money to pay for abortions in
Washington, a provision that has already been included in past
budgets.

As part of the compromise, the Senate also agreed to hold a
vote on blocking implementation of Obama’s healthcare reform
law, but that measure is expected to fail.

The bill subjects the new Consumer Financial Protection
Bureau to yearly audits by both the private sector and the
congressional Government Accountability Office.
(Reporting by Andy Sullivan, Kim Dixon and Andrea Shalal-Esa
in Washington; editing by Mohammad Zargham)

FACTBOX-Details of deal reached to keep US government running