Congressional Leaders Strike Deal on Spending Levels, Navigating Away from Shutdown Risk

Congress achieved a spending agreement for the current fiscal year, preventing a government shutdown. Congress set spending restrictions for defense and domestic programs as part of a debt limit suspension package until 2025. The agreement matches them. The revised pact addresses House Republicans’ complaints about the first spending constraints, but it otherwise follows the agreement between then-Speaker Kevin McCarthy and President Joe Biden.

Speaker Johnson Touts Budget Deal as Best in a Decade, Despite Senate Gap

In a message to colleagues, House Speaker Mike Johnson said the agreement provides $16 billion more in expenditure cutbacks than before. Johnson called this arrangement the best Republican budget agreement in over a decade. However, it is $30 billion less than the Senate’s proposal.

The most extreme House Republicans protested the earlier debt ceiling agreement, halting House proceedings. Speaker Johnson was challenged by Democrats’ commitment to the debt ceiling agreement’s spending caps while these members wanted greater concessions.

President Biden said the agreement helps prevent a government shutdown and protect national interests. Biden noted that the accord matches funding levels negotiated with both parties and passed in spring. He stressed rejecting substantial cuts to critical services and providing a method to pass full-year spending measures without extreme policies.

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Budget Deal Expedites Savings and Rescinds COVID Relief Funds, Averts Shutdown Risk

Speaker Johnson’s letter states that the deal expedites $20 billion in IRS savings and rescinds $6 billion in COVID relief payments that were approved but not used. With funds scheduled to lapse for certain agencies on January 19 and others on February 2, lawmakers needed this arrangement to craft specific agency spending bills.

This budget arrangement is separate from negotiations for Israel and Ukraine assistance and asylum claim easing at the U.S. border. In a joint statement, Senate Majority Leader Chuck Schumer and House Democratic leader Hakeem Jeffries supported the agreement, emphasizing its importance in securing investments for hardworking American families and rejecting contentious policy changes in appropriations bills.

READ ALSO: Leaders in Congress reach agreement on spending levels in key step to avoiding shutdown