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US budget deal passes Congress

Update: December, 19/2013 - 11:03

WASHINGTON, United States – The US Senate passed a compromise two-year budget accord Wednesday, marking a truce in the fiscal wars that have plagued Washington and reducing the likelihood of a government shutdown in January.

The measure, which already cleared the House and passed the Senate 64-36 with the support of nine Republicans and the entire Democratic caucus, now goes to President Barack Obama, who said he was "pleased" with the vote.

He is expected to sign the legislation before heading to Hawaii on Friday for his Christmas break.

The deal lays out top-line spending limits for 2014 and 2015, while erasing some painful and automatic spending cuts that were due to kick in on January 1.

The legislation was one of the final major accomplishments for Congress in 2013, which by all accounts has been a miserable year for US lawmakers. Following the expected approval on Thursday of a massive defense spending bill later this week as well as several executive and judicial nominations, the Senate recesses until early January.

Obama described the agreement – the first time in years that Congress has passed a budget – as "a good first step away from the shortsighted, crisis-driven decision-making that has only served to act as a drag on our economy.

"It helps chart our economic course for the next two years, which means that the American people won't be exposed to another painful and unwise government shutdown," he added.

The bill's authors, Senate Budget Committee Chairwoman Patty Murray and her House counterpart, Republican Paul Ryan, were standing up the legislation as a major accomplishment in an era of brutal partisan warfare.

The agreement "breaks through this partisanship and gridlock and shows that Congress can function," Murray told her colleagues.

Lawmakers from both chambers now have until January 15 to craft a series of spending bills under the new limit, or risk another shutdown like the one that paralyzed Washington in October.

The bill increases the $967 billion cap for 2013 spending to $1.012 trillion next year and $1.014 trillion in 2015, and brings some normalcy to a process recently rocked by chaos. According to Ryan, the 2012 Republican vice presidential nominee, the vote "shows both parties – in both chambers – can find common ground. We can work together."

But he stressed it was just a small first step toward greater financial reform.

"We need to do a lot more," Ryan said.

Many Senate Republicans, including Minority Leader Mitch McConnell, voted against the deal, arguing it breaks spending limits set in 2011 legislation.

The modest deal eliminates $63 billion in the arbitrary spending cuts known as sequestration, and reduces the deficit by about $23 billion.

The new spending on defense and domestic programs is offset by raising the amount new federal workers must contribute to their retirement plans, and boosting air travel fees to the Transportation Security Administration.

It does not close tax loopholes or include an extension of unemployment benefits, something Democrats have complained bitterly about.

Nor does it address reform of entitlement programmes such as Social Security and Medicare, long sought by Republicans.

And it has angered many on both sides of the aisle because it revokes cost of living adjustments for US military retirees, a move that saved $6 billion.

Even while it does bring a sense of stability to Washington's fiscal wrangling until after the 2014 congressional elections, a spending battle is brewing on the horizon.

The accord notably does not extend the debt ceiling, which Washington needs to raise by February or March if it wants to avoid a dangerous credit default.

And that is where Republicans may seek to strike. Ryan told "Fox News Sunday" that his caucus will gather next month to "discuss what it is we want to get out of the debt limit."

"We don't want nothing out of this debt limit," he added.

McConnell too suggested congressional Republicans were gearing for battle.

"I doubt if the House, or for that matter the Senate, is willing to give the president a clean debt ceiling increase" without some concession from Democrats, McConnell said on Tuesday.

Washington has been embroiled in a near-constant cycle of fiscal warfare since 2011, when a grand bargain between Obama and Republicans collapsed. The gridlock came to a head in October, when the feuding parties failed to agree on a budget and plunged the government into a costly, 16-day shutdown. AFP

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