The U.S. Congress approved a compromise bill on Tuesday to fund the government for several months as lawmakers postponed a struggle over spending and the deficit until next year.

The bill to fund the government through March 4 gives Republicans the chance to try to push through dramatic budget cuts when they take control of the House of Representatives and have more members in the Senate early next year.

"Most of next year will simply be about demonstrating political leverage rather than working through honest, substantive differences," said Democratic Representative David Obey, who is retiring and giving up his top spot on the Appropriations Committee.

The measure now heads to President Barack Obama to sign into law.

The bill, which essentially keeps the government operating on automatic pilot, would deny Obama the budget increases he has sought to implement his signature reforms of healthcare and financial regulations.

It also would prevent pay raises for federal nonmilitary employees for two years, a measure Obama proposed to show that he is willing to take steps to pare spending after years of budget increases for everything from job creation to environmental protection.

The bill passed the House by a vote of 193 to 165 after clearing the Senate earlier in the day.

By the time the measure runs out on March 4, Republicans will have a greater ability to influence spending priorities for the remainder of the fiscal year, which ends September 30.

House Republicans have said they want to trim $100 billion in spending, but Obama and Democrats who will still control the Senate are not likely to go along, creating a recipe for confrontation and a risk of government shutdown.

"We've kicked the ball down the field a little bit, but on March the 4th the battle will be joined again," said Democratic Senator Tom Harkin.

Democrats had sought to lock in funding through the end of the fiscal year before the new crop of Republicans take office. But that approach died in the Senate last week.

Harkin warned that Republican cuts could devastate efforts to retrain unemployed workers and educate low-income children when the sluggish economy has made such programs needed more than ever.

Republican Tom Coburn, one of the Senate's foremost fiscal hawks, said lawmakers need to start making tough choices to reduce annual budget deficits that are at their highest level relative to the size of the economy since World War Two.

"Our nation has a very short time with which to reassess and reprioritize what is important in our fiscal matters," Coburn said. "The fact is, is everything's going to have to be looked at."

 

NO BOOST FOR FINANCIAL REGULATORS

The bill denies Obama the budget increases he had sought for the Commodity Futures Trading Commission and the Securities and Exchange Commission to ramp up regulation and oversight of Wall Street called for in the Dodd-Frank Act, which Congress passed in July.

The bill would give regulators only 30 days to review applications for offshore oil and gas drilling, rather than the 90 days sought by the administration in the wake of the massive BP oil spill in the Gulf of Mexico.

It includes a minor victory for Obama, as a provision that would have prevented terrorism suspects from coming to the United States to face criminal trial has been dropped.

It would largely continue funding for other government programs at their current levels, with increases for some programs like veterans affairs.

Because Congress has failed to pass any of the 12 bills that fund government operations this year, lawmakers have resorted to repeated stopgap measures to keep federal workers on the job.

That approach has made it more difficult for the government to function on a nuts-and-bolts level, as agencies cannot hand out new contracts or move forward with other projects that would have been possible under a new budget.

For example, people applying for disability payments could face a longer wait as the Social Security Administration does not get the funding increase it had sought, some advocates worry.