Done deal: Congress, White House keep government open

With just over an hour left before the government would have shut down, congressional leaders and the White House announced an agreement to fund the government for the rest of the year and a deal to keep the government functioning beyond the Friday midnight deadline. The agreement ends a long-running and frustrating legislative and political sideshow that threatened to bring the entire government to a halt. With minutes to go before a shutdown, all sides declared victory.

"I'm pleased to announce that the Washington monument, as well as the entire federal government, will be open for business. That's because today Americans of different beliefs came together again," President Obama said.

The announced agreement would cut $39 billion from current spending and allocate $513 billion for the defense budget covering the remainder of this fiscal year. The deal also included a GOP agreement to abandon controversial policy riders dealing with Planned Parenthood and the Environmental Protection Agency, and an agreement to pass a "bridge" continuing resolution to keep the government operating while the larger deal is drafted.

"We will in fact cut spending and keep our government open," House Speaker John Boehner, R-Ohio, said in announcing the deal just before 11 p.m.

On the Senate floor, Senate Majority Leader Harry Reid, D-Nev., described the cuts involved as historic and the beginning of much "hard work" ahead to "get our fiscal house in order." Senate Minority Leader Mitch McConnell, R-Ky., who sanguinely predicted a resolution of the budgetary troubles early in the day, said Republicans had a choice to repeat history by taking part in another government shutdown but chose instead "to make history" by negotiating the biggest discretionary cuts ever seen.

As part of the deal, the Senate will debate and vote on the GOP provision to defund Planned Parenthood, a measure sure to fail. But the promise of a full debate gives Republicans procedural cover that the issue will not die without a vote. A GOP spending bill passed by the House last year would have prohibited federal funds from going to the group. The final package will also include language restricting access to abortion in the District of Columbia.

"I would expect a final vote on this to occur mid-next week, but I do believe we'll have a ... bridge continuing resolution passed tonight," Boehner said. ""We fought to keep government spending down because it really will affect, and help create a better environment for, our job creators."

The $39 billion in cuts includes $3 billion in reductions to the Defense Department, which would still be $5 billion above the current fiscal year, said Rep. Mike Rogers, R-Ala.

A GOP leadership aide confirmed that as part of the final negotiations on a long-term continuing resolution, Democrats have agreed to attach a rider to the bill that provides for an annual audit of the Consumer Financial Protection Bureau, created under the Dodd-Frank financial regulatory overhaul. Conservatives have opposed the creation of the CFPB as onerous. The audit will be conducted by the private sector in conjunction with the Government Accountability Office.

The deal end weeks of heated and sometime frustrating negotiations that were constantly on the verge of collapse. The chaos of it all would have made a Founding Father either blush with pride or wretch in revulsion. With hours to go before the shutdown, the federal government lurched awkwardly toward a deal to keep the government open and impose the largest one-time cut ever in discretionary spending.

And through the Halls of Congress echoes of Howie Mandel's popular TV show "Deal or No Deal" rang repetitively in the ears of lawmakers, lobbyists, reporters, bewildered tourists and legions of thunderstruck taxpayers wondering if this was the best American government could produce under pressure.

The first public confirmation of a deal rumored for hours came, appropriately enough, not through a floor speech or press conference, but through a Twitter message from Reid's spokesman Jon Summers: "We have an agreement. Details/statement coming soon."

In the end, the framers might well have considered the spectacle a prism through which to view the essentials of the government it bequeathed and the ludicrous wrangling of myopic political turf-minders. On the one hand, a legitimate and fundamental debate was occurring over governing - spending how much on what. On the other, numerous larger and more substantive issues of government were held hostage by a partisan cat fight over miniscule spending (viewed in the grand scheme of a $3.5 trillion budget) for women's health care funding and the regulatory reach of the EPA.

As Boehner briefed his House GOP colleagues on the outline of the deal, he described the final product as "the best deal we could get out of them," according to a GOP lawmaker in the meeting who requested anonymity. Earlier, a top Boehner spokesman, Michael Steel, described Boehner as a "happy warrior" - this after a rousing House GOP Conference before the final handshakes in which rank-and-file members told him to end the impasse and they would back his judgment on the politics and policy.

Some House Republicans will grouse about caving and abandoning core principles and will defy Boehner and vote against his deal. House GOP sources fear as many as 40 defections, but will work strenuously to keep the number below 30. But some Democratic votes will be required to get Boehner's biggest legislative achievement as speaker across the finish line -- a bittersweet reality that speaks to the Ohio Republican's core pragmatism. Boehner will find 218 votes where he can get them, preferring to collect them from his party but willing to take them from Democrats in pursuit of what he perceives is the greater good.

And as the specter of a shutdown loomed large, Boehner knew his Conference didn't have the stomach for the fight any longer. But he waited for the rank and file to express this underlying sentiment of fatigue. It was personified by Rep. Austin Scott of Georgia, president of the 87-member freshmen class, who late Friday afternoon offered Boehner sight-unseen support.

"I trust you and I'll support you on whatever deal you bring us," Scott told Boehner in the earlier GOP closed-door meeting.

The Senate passed a short-term continuing resolution to keep the government operating until next Friday with spending cuts of $3 billion. This measure will keep all government functions operating while legislation is drafted wrapping up all spending matters for the 2011 fiscal year. The stop-gap will be the seventh of its kind since the Democratically controlled 111th Congress failed to approve the necessary 2011 spending bills before the 2010 elections. Senate Republicans filibustered an omnibus spending bill during the lame-duck session, forcing Democrats and the White House to reconcile themselves to tighter discretionary spending budgets in the aftermath of the GOP-engineered mid-term "shellacking."

That so much of the vast array of government services -- from national parks to boots on the ground, from scientific research to tax refund processing, from federal contractors to hundreds of thousands of "non-essential" federal employees -- appeared absurd to most Americans. Polls consistently showed all sides would suffer in the government shutdown. The clash of political forces -- a Democratic president girding for re-election, an aggressive House GOP majority attempting to prove its negotiating clout, and a Senate Democratic Caucus nervously eyeing 2012 with 23 members up for re-election - was unlike anything the country had ever seen.

In the end, House Republicans won more spending cuts than Senate Democrats were initially prepared to surrender. Obama remained cagey throughout, never ruling any particular number out of bounds and keeping his own programmatic priorities a secret until hard-edged negotiations took all sides to the brink of a shutdown.

Just hours before the deal was sealed, Boehner complained to a fellow Republican that Obama was "nickel and diming us to death." It may have been the highest compliment Boehner's ever paid to Obama - viewed in the context that in the metaphorical trenches of staff negotiations, Obama was driving an exasperating bargain. Negotiators tell National Journal it was Office and Management and Budget Director Jack Lew he fought over each line in the reshaped and pared back budget and that Senate Democrats largely acquiesced to White House priorities.

Susan Davis, Humberto Sanchez, Billy House and Dan Friedman contributed to this report.