By MICHAEL FALCONE and AMY WALTER
The government is up and running as usual this morning thanks to an 11th hour deal struck last night by negotiators on Capitol Hill, but here’s a word to the wise: the intensity of the past week will be nothing compared to the coming battle over even larger spending issues.
As Sen. Kay Bailey Hutchison, R-Tex., said in an interview last night, the fight over whether or not to raise the debt limit “is going to be Armageddon.”
“We have to see reforms before the debt ceiling is raised … or we would be in danger of having to face this again in another year or two, which we cannot do” Hutchison said in an interview on CNN. “We cannot sustain a $14 trillion debt.”
Her Republican counterpart from Texas, Sen. John Cornyn, tweeted this morning, “Now on to the main event: the debt limit. Huge leverage for systemic fiscal reform.”
More on what comes next below, but first, how did both sides reach the agreement that avoided closing down the federal government?
“In the final hours before our government would have been forced to shut down, leaders in both parties reached an agreement,” President Obama said against the backdrop of the Washington Monument last night. “Beginning to live within our means is the only way to protect those investments that will help America compete for new jobs — investments in our kids’ education and student loans; in clean energy and life-saving medical research. We protected the investments we need to win the future.”
THE DEAL. ABC’s Jake Tapper, Jonathan Karl and Michael James report that the agreement would cut about $38 billion from the 2010 budget baseline and $78.5 billion from President Obama's 2011 budget proposal, officials said. It also would keep intact funding to Planned Parenthood and resist several other Republican-proposed policy changes. http://abcn.ws/f0WP1n
“At the end of the day,” President Obama said last night, “this was a debate about spending cuts, not social issues like women’s health and the protection of our air and water. These are important issues that deserve discussion — just not during a debate about our budget.”
The House and Senate passed temporary resolutions to keep the government funded after midnight last night when it was scheduled to run out. A full agreement will need to be drafted and passed by Congress next week. The short-term “bridge,” as House Speaker John Boehner, R-Ohio, described it last night, includes the first $2 billion in cuts.
“I would expect the final vote on this to occur mid-next week," Boehner said. "This has been a long discussion and a long fight, but we fought to keep government spending down because it really will, in fact, help create a better environment for job creators in our country."
Senate Majority Leader Harry Reid, D-Nev., said in a speech on the Senate floor last night, "This is historic, what we've done."
BOTTOM LINE: It was messy. It was unnecessarily dramatic. But, it ended without monuments being shuttered or troops waiting for a paycheck. And, in the end, everyone gets to claim victory. Democrats get to say that they cut spending while also protecting women's reproductive rights. Republicans can crow that they forced President Obama and Sen. Harry Reid to make deeper cuts than Democrats wanted to make.
Welcome to the “new normal” of bipartisanship.
NOTED: After the deal was struck, government staffers, Congressional aides — and journalists too — all seemed to breathe a collective sigh of relief that everyone would still be able to communicate via Blackberry. Phew.
THE BATTLE YET TO COME. “In the next month, the Congress will have to pass an increase to the Federal Debt Limit — which currently stands at $14.294 trillion — or risk defaulting on interest payments on the nation’s debt,” ABC’s Dan Arnall notes. “Imagine the Congressional wrangling over a vote which would expand the Federal government’s borrowing authority by an additional trillion dollars (the nine most recent increases since 1997 have averaged $977 billion in new borrowing authority). The Treasury says that Congress must act by May 16 to insure the continued functioning of the government — with some financial high-wire acts, that could be pushed a few weeks into June. Without it, administration officials and private sector economists say, the U.S. government and private sector economy would face a catastrophe. Imagine the world’s biggest debtor — Uncle Sam — missing a few payments on his credit cards. Is anyone going to want to lend him money at a reasonable rate moving forward? Probably not.” http://abcn.ws/dTuVxu
INSIDE THE DEAL. Speaker Boehner’s office circulated a “key facts” memo last night outlining some of what Republicans got out of the agreement:
“The agreement reached with Senate Democrats guarantees a Senate debate and vote on legislation that would repeal President Obama’s government takeover of health care in its entirety. … The agreement will generate new tools for the fight to repeal Obamacare by requiring numerous studies that will force the Obama Administration to reveal the true impact of the law’s mandates … The Obama administration has sought increased federal funding for the Internal Revenue Service (IRS) … This increased funding is denied in the agreement. … The agreement with Senate Democrats guarantees a Senate debate and vote on legislation that would end federal funding for Planned Parenthood. … The agreement includes a complete ban on local and federal funding of abortion in the District of Columbia.” http://bit.ly/gB9ybz
ABC’s Jake Tapper and Jonathan Karl note, however, that “Democratic officials tried to portray the deadline deal as one in which Boehner blinked. They argued the level of cuts were similar to those discussed during a meeting at the White House the night before. The officials said Boehner came back during Friday asking for more cuts, but Obama refused. In addition, money will not be taken from programs the president favors, such as Head Start, but instead from the automatic ‘mandatory spending’ appropriated for departments such as the Pentagon and the Department of Transportation. ‘They gave on the EPA, NPR, and Planned Parenthood riders,’ a Democratic official said.” http://abcn.ws/f0WP1n
HOW IT HAPPENED:
ON THE HILL. ABC’s Matthew Jaffe and John R. Parkinson reported that the Senate last night passed the stop-gap spending bill to avert a government shutdown shortly after 11:00 p.m. by a voice vote — just minutes away from the midnight deadline. The House followed suit around 12:40 a.m. by a vote of 348-70. Twenty-eight Republicans and 42 Democrats voted against the bill, and 15 members missed the vote. Although the vote was after midnight, the legislation was designed to retroactively fund the 40-minute lapse in funding. Obama is expected to sign the continuing resolution later today.
TICK, TOCK, TICK TOCK. ABC’s Sunlen Miller walks us through the final days of negotiations to avert a shutdown from the White House's perspective:
On Friday President Obama spoke with Boehner, R-Ohio, four times, and Reid “multiple times.” … “In many respects, the composition was more important than the number,” a senior administration official briefing reporters in the Roosevelt Room of the White House said of the administration’s strategy. … White House officials described Thursday night’s meeting between President Obama, Reid and Boehner as a “key moment” when Boehner agreed on a target number for cuts. Somehow, overnight and into Friday morning during negotiations at the staff level that message got muddled. Friday morning, President Obama appealed directly to Speaker Boehner and said, “I’m president, you’re the speaker … love our staffs but this is about us. … What we talked about last night has to be reflected in the negotiations.” http://abcn.ws/gHxcpy
And Matthew Jaffe pieces together the details from that pivotal Thursday night meeting and the negotiations that spilled into Friday:
It was Thursday night in the Oval Office … President Obama had just agreed to House Speaker John Boehner’s request to include a Republican policy rider to ban taxpayer funding of abortion in Washington, DC, but Boehner wanted more: to defund Planned Parenthood. The response from the president was blunt. “Nope. Zero,” the president told Boehner, according to a senior Democratic aide. … “There were a good 10 minutes of just sitting there of everybody looking at each other,” the aide recalled. … The Senate’s number-two Democrat Dick Durbin eventually suggested a compromise: the Senate would hold votes on eliminating the Planned Parenthood funding, subject to a 60-vote threshold that Republicans would never reach in the Democrat-controlled upper chamber of Congress. … Still, it took until 8 p.m. Friday before both parties agreed on a top line number. Then Republicans wanted the appropriators to switch a few things around. More time went by. In the end the clock was hitting 10:30 p.m. Friday night when the chief staff negotiators — Rob Nabors of the White House Office of Legislative Affairs, Boehner chief of staff Barry Jackson, and Reid’s top staffer David Krone — finally shook hands on a final deal. It was a good thing they settled matters when they did, too. Just then, the president called Nabors and Reid called Krone to find out “what the hell was going on,” the aide said. Fortunately, the negotiators had good news for their bosses: the $38 billion deal was done. http://abcn.ws/gsMJvs
NOTABLE: One top right-leaning political operative told The Note what we learned from last night: “Compromises can still be made … Tea Party types, especially [Iowa Rep. Steve] King, [Minnesota Rep. Michele] Bachmann and [Kentucky Sen. Rand] Paul believe their ticket to fame will be always opposing anything that looks like compromise and staying ‘true to conservative principles’ … John Boehner is a savvy operator.”
TUNE INTO ‘THIS WEEK.’ Tomorrow, ABC “This Week” anchor, Christiane Amanpour, talks with two key lawmakers involved in the past week’s budget wrangling: Republican Congressman Mike Pence, who led the charge against providing federal funding to Planned Parenthood, and Democratic Congressman Chris Van Hollen. http://abcn.ws/dGoD5F
Amanpour also convenes the “This Week” roundtable with George Will, Democratic strategist Donna Brazile, Chrystia Freeland of Thomson-Reuters and National Journal's Ron Brownstein.
And, finally, a conversation with an actor who’s portrayed candidates, reporters and spies in classic Washington films and now his new film, “The Conspirator,” tells the story of the only woman charged in the plot to assassinate President Abraham Lincoln. A Sunday exclusive interview with Academy Award-winning actor and director and actor Robert Redford.
A TEST FOR THE NEW SPEAKER. “House Speaker John Boehner likes to lament that his party controls just ‘one-half of one-third of the government.’ But whether by design or necessity, Boehner managed to make the most of that limited leverage — both in forcing President Obama and the Democrats to come more than halfway on his party’s demand for spending cuts, and in making the absolutists in his own ranks accept the principle that compromise is part of governing,” the Washington Post’s Karen Tumulty writes. “The tense back-and-forth that brought the government to the brink of a shutdown Friday represented the first big test of Boehner’s leadership and a glimpse of how the new speaker will handle a job that has had more than its share of challenges: a tough economy, a Democratic president and Senate, a rebellious contingent of inexperienced tea party freshmen, and an ambitious, sometimes fractious team of lieutenants, some of whom have aspirations for Boehner’s job.” http://wapo.st/dMBBaO
TEA PARTY DIGS IN. “Rep. Michele Bachmann (R-Minn.), a potential 2012 presidential candidate, was one of 28 House Republicans who voted against a one-week spending bill early Saturday morning meant to avoid a government shutdown,” The Hill’s Shane D’Aprile notes. “In a statement released shortly after the vote, Bachmann said she was protesting the overall agreement on the long-term funding measure, which she called a ‘disappointment for me and millions of Americans’ who, she said, ‘expected’ $61 billion in cuts from current spending levels. Along with Bachmann, at least a dozen Republican freshmen voted against the one-week measure, including Reps. Tim Scott (S.C.), Scott Rigell (Va.), Raul Labrador (Idaho), Mick Mulvaney (S.C.), Steven Palazzo (Miss.), Andy Harris (Md.) and Tim Huelskamp (Kan.). … Rep. Allen West (R-Fla.), who told The Hill that he would vote against the overall budget deal, did vote in favor of the one-week CR.” http://bit.ly/fxu2Sg
NOTABLE: “Leaders of the small-government, tea-party movement are generally giving House Speaker John Boehner high marks for his leadership in the spending showdown, even though the agreement eventually reached Friday night fell short of the cuts the tea party once demanded,” The Wall Street Journal’s Jonathan Weisman and Jennifer Levitz report. “As negotiations inched close to a deal late Friday, much of the movement's institutional leadership resisted raising the temperature and were willing to cut Mr. Boehner some slack, in hope that he will extract more dramatic concessions in the budget showdowns to come.” http://on.wsj.com/gxQD8W
RENEWED DEBATE OVER ABORTION. The emergence of abortion as the last and most contentious of the issues that held up the budget deal reached Friday night highlighted the enduring influence of social conservatives within the Republican Party even at a time when the Tea Party movement’s focus on fiscal austerity is getting most of the attention,” The New York Times’ Jennifer Steinhauer reports. “The social conservatives established that they have a welcome ear in Speaker John A. Boehner of Ohio, who has won awards from opponents of abortion rights and during the debate over health care of provisions was a visible supporter of preventing federal money from going to abortion providers like Planned Parenthood. … But the high-profile fight held political peril for Republicans in particular when it comes to appealing to women and the broad center of American politics. In polls taken this year and last by The New York Times/CBS News, when Americans were asked to name the most important problem facing the country, fewer than 1 percent cited abortion.” http://nyti.ms/fMbK7j
@HenryBarbour: A sm victory 4 the American people in budget deal. A downpayment. A start down a better path. Finally, in DC it's about how much to cut.
* Herman Cain will speak at the Pennsylvania Leadership Conference in Harrisburg, Pennsylvania.
* Rick Santorum will be the featured speaker at the Camden County Republican Club Lincoln Days Dinner in Lake Ozark, Missouri.
* Mike Huckabee will be in Akron, Ohio for the Summit County Republican Party's annual Lincoln Day Dinner. He will deliver the keynote speech at 6 p.m.
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