Last-Minute Deal Saves Federal Government From Shutdown

April 11, 2011 | By Liza Casabona | Post a Comment

It looks like President Obama “pulling the car over” may have made a difference after all. Before the federal government’s funding was cut off at midnight on Friday, negotiators narrowly avoided a shutdown by reaching a deal for the fiscal year 2011 budget in the eleventh hour – literally.

The deal cuts $38.5 billion from spending for the rest of the year, which is more than Democrats initially supported but less than the Republican-backed H.R. 1 that passed the House and died in the Senate. The text of the spending measure isn’t available yet, but could be released as soon as this afternoon.

Since the deal was actually agreed upon with just minutes to spare, Congress passed one last CR to keep things running through this Thursday to buy time for the full-year measure to be crafted, passed and signed by the president. The temporary measure included cuts of almost $2 billion, largely from transportation and housing programs, which will be part of the total cuts agreed to for the rest of the fiscal year.

According to the Senate Appropriations Committee, the stopgap measure also included a $220 million cut to the Community Development Block Grant program. The CDBG formula amount will be the same in FY 2011 as it was in FY 2010, but funding was reduced for the Economic Development Initiative, Neighborhood Initiative and the University Communities Fund.

The temporary CR also cut $1.5 billion of funding for High Speed Rail Corridors and Intercity Passenger Rail Service Capital Assistance, as compared to FY 2010. The measure trimmed $280 million from Capital Investment Grants and $149 million from the Public Housing Operating Fund.

As dramatic as the negotiations for FY 2011 were in the end, this is likely just the prelude to even more fractious dealings over spending as legislators turn their attention to the debt ceiling and FY 2012 in the coming weeks.

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