WASHINGTON — A last minute budget deal, forged amid bluster and tough bargaining, averted an embarrassing federal shutdown and cut billions in spending — the first major test of the divided government voters ushered in five months ago.
Working late into the evening Friday, congressional and White House negotiators struck an agreement to pay for government operations through the end of September while trimming $38.5 billion in spending. Lawmakers then approved a days-long stopgap measure to keep the government running while the details of the new spending plan were written into legislation.
Actual approval of the deal would come in mid-week.
"Today Americans of different beliefs came together again," President Barack Obama said from the White House Blue Room, a setting chosen to offer a clear view of the Washington Monument over his right shoulder.
The agreement — negotiated by the new Republican speaker of the House, John Boehner, the president and the Senate Democratic leader, Harry Reid — came as the administration was poised to shutter federal services, from national parks to tax-season help centers, and to send furlough notices to hundreds of thousands of federal workers. It was a prospect that all sides insisted they wanted to avoid but that at times seemed all but inevitable.
Shortly after midnight, White House budget director Jacob Lew issued a memo instructing the government's departments and agencies to continue their normal operations.
Boehner said the agreement came after "a lot of discussion and a long fight," and he won an ovation from his rank and file, including the new tea party adherents whose victories last November shifted control of the House to the GOP.
Reid declared the deal "historic."
The deal marked the end of a three-way clash of wills, but it also set the tone for coming confrontations over raising the government's borrowing limit, the 2012 budget and long-term deficit reduction.