US Congress leaders announce agreement on spending levels to avert shutdown

Congressional leaders have reached an agreement on topline spending levels for the current fiscal year that could help avoid a partial government shutdown later this month.

The agreement largely hues to spending caps for defense and domestic programmes that Congress set as part of a bill to suspend the debt limit until 2025. But it does provide some concessions to House Republicans who viewed the spending restrictions in that agreement as insufficient.

In a letter to colleagues, House Speaker Mike Johnson said Sunday it will secure $16 billion in additional spending cuts from the previous agreement brokered by then-Speaker Kevin McCarthy and President Joe Biden and is about $30 billion less than what the Senate was considering.

This represents the most favourable budget agreement Republicans have achieved in over a decade, Johnson writes.

Biden said the agreement moves us one step closer to preventing a needless government shutdown and protecting important national priorities.

It reflects the funding levels that I negotiated with both parties and signed into law last spring. It rejects deep cuts to programmes hardworking families count on, and provides a path to passing full-year funding bills that deliver for the American people and are free of any extreme policies, Biden said in a statement.

The agreement speeds up the roughly $20 billion in cuts already agreed to for the Internal Revenue Service and rescinds about $6 billion in Covid relief funds that had been approved but not yet spent, according to Johnson's letter.

Lawmakers needed an agreement on overall spending levels so that appropriators could write the bills that set line-by-line funding for agencies. Funding is set to lapse January 19 for some agencies and February 2 for others.

The agreement is separate from the negotiations that are taking place to secure additional funding for Israel and Ukraine while also curbing restrictions on asylum claims at the US border.

In a joint statement, Senate Majority Leader Chuck Schumer and House Democratic leader Hakeem Jeffries also voiced their support for the agreement.

It will also allow us to keep the investments for hardworking American families secured by the legislative achievements of President Biden and Congressional Democrats, Schumer and Jeffries said. "Finally, we have made clear to Speaker Mike Johnson that Democrats will not support including poison pill policy changes in any of the twelve appropriations bills put before the Congress.