Congress Passes $38B Spending Cut Bill

The Congress on Thursday approved a budget deal to avert a government shutdown, but mass defections in both parties showed the difficult fights ahead on spending and debt reduction.

In a bipartisan 260-167 vote, the House of Representatives passed the compromise struck last week by President Barack Obama and congressional leaders to cut $38 billion in spending for the current fiscal year that ends September 30.

About one-fourth of House Republicans and more than half of Democrats opposed the deal, with Republicans arguing the cuts were not deep enough and Democrats fearing they would hurt lower-income Americans.

The Senate also passed the bill by an 81-19 vote and sent it to Obama for his signature, with 15 Republicans, three Democrats and one independent voting no.

The defections raised questions about the ability of Republican House Speaker John Boehner and Democrat Obama to keep their party members in line during the next round of showdowns on raising the $14.3 trillion debt limit and passing a budget for the 2012 fiscal year budget.

Boehner had been under pressure to show he could get the 218 votes he needed to pass the budget deal without Democratic support, which would have strengthened his hand in the coming negotiations. But he fell short.

"My guess is that he's not going to be sleeping all that well tonight," said Stan Collender, a budget analyst with Qorvis Communications in Washington.

Obama made long-term debt reduction a priority on Wednesday in a speech calling for cutting $4 trillion of the budget deficit over 12 years, ensuring the issue will be a prime focus during his 2012 re-election campaign.

Both leaders have been whipsawed on the budget issue by conservative Republicans and liberal Democrats unhappy with the compromises made to reach a final deal.


The House vote came after the nonpartisan Congressional Budget Office circulated a new estimate that found the budget deal's actual impact on government spending was likely to fall short of the agreed $38 billion cut.

Rather, the CBO said, it would reduce spending by $20 billion to $25 billion over the coming years, because many of the cuts would have no impact on the government's bottom line.

Representative Bill Huizenga, one of a crop of newly elected Republicans who have shown little interest in compromise, said he voted against the measure because it did not cut spending enough.

"I couldn't go back and look at my constituents and say, 'Mission accomplished'," he told reporters, arguing that the Republican defections could actually strengthen Boehner's hand in negotiations with the Democratic-controlled Senate.

"If anything I think he needs to go in and say, 'Look, if I'm going to control my caucus ... we've got to go further'," Huizenga said.

Democratic lawmaker Marcy Kaptur said she had voted no on the deal because "ordinary people will be hurt very much by these cutbacks. She accused Obama of failing to "really stand his ground to the most powerful forces in this society."

House Republican Kevin Brady voted yes, but said the 59 Republican defectors were "hungry for cuts. More. Bigger. Sooner."

Obama has said he will push to end tax breaks for the wealthiest Americans, part of his long-term debt reduction plan, which has been criticized by Republicans who say it would hurt small businesses and hinder economic growth.

But Obama defended his call to raise taxes on the rich, saying all Americans must share the burden of reducing the long-term budget deficit.

"It's not appropriate for us to ask for sacrifices from everybody except for the two percent of Americans who are doing best," Obama said after meeting with Democrat Erskine Bowles and Republican Alan Simpson, who led a panel that made recommendations on cutting the budget deficit.

"We should ask everybody to participate in this effort to get our fiscal house in order," he said.

Treasury Secretary Timothy Geithner repeated administration warnings that a failure to raise the nation's debt limit in the next few months would be irresponsible and have grave economic consequences.

He told Republicans in Congress they would take the blame if they played politics with the issue and bring the United States too close to defaulting on its debt, which would roil financial markets worldwide.