US Congress reaches deal to avoid shutdown

2011-12-16 08:01

Washington - US lawmakers clinched a deal late on Thursday to avoid a government shutdown that could have further undermined public confidence in American leaders, congressional sources said.

Negotiators from the Republican-controlled House of Representatives and the Democrat-dominated Senate agreed to allow a vote by Friday on a $1 trillion bill that would fund the government through fiscal year 2012.

If the vote goes through by the deadline, it would prevent federally-funded Christmas events, public buildings and government agencies from going dark after running out of money.

"I am hopeful that the House and Senate can pass this bill tomorrow to prevent a government shutdown, fund critical programmes and services for the American people and cut spending to help put the nation’s finances on a more sustainable path," House appropriations committee chairperson Hal Rogers said in announcing the deal.

Heated negotiations took place throughout the day as lawmakers sought to break the impasse, one driven by pre-positioning for President Barack Obama's 2012 re-election bid and deep antipathy between the parties.

The root of the stalemate lay in brinkmanship by both parties over a push by Obama for a $1 500 tax cut for 160 million workers and a Republican bid to force him to reconsider delaying a decision on a Canada-US pipeline plan.

A Democratic source said negotiations were still underway to work on a "full deal".

Senate Democratic Majority Leader Harry Reid said he was weighing a two-month extension of the payroll tax cut and unemployment benefits that would leave the rates unchanged.

Read more on:    us  |  us economy  |  us elections 2012
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