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Deal Reached to Cut Federal Programs by $38 Billion

Late Friday night President Obama and Congressional leaders reached a deal that would avert a shutdown and fund the government for an additional week to allow time for both sides to work out a longer term funding bill that will fund the government through the end of September. Congress passed a week-long continuing resolution (CR) which includes $2 billion in cuts, all of which target transportation programs. The figure for cuts reached in the deal for the long-term bill is $38.5 billion (including the $2 billion in the two week CR).

While details have not yet been worked out, here is what we have heard from sources:

  • Defense programs will receive a $4 billion increase, so the cut to domestic programs will be $42 billion.
  • There will be a 0.1% across-the-board cut to all programs.
  • Race to the Top will receive $700 million.
  • The Pell maximum award of $5,550 was maintained.

In a statement released on Saturday, the White House said that “The two sides agreed to cut $13 billion from funding for programs at the Departments of Labor, Education, and Health and Human Services.” We do not know where those cuts will come from, but details are expected to be released sometime today.

The House is scheduled to vote on the long-term CR on Wednesday.

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