US government shut-down averted

9 April 2011 Last updated at 11:24 GMT President Obama said both sides made tough decisions and given ground on important issues

Republicans and Democrats have reached a deal on the US budget, an hour before a deadline that would have forced the government to close many services.

They have passed a stop-gap spending bill which will allow the government to keep running while the wider budget plan is finalised.

The parties have agreed to slash about $38bn (£23bn) from spending for the year until 30 September.

President Barack Obama said the cuts would be difficult but necessary.

"Some of the cuts we agreed to will be painful," he said.

"Programmes people rely on will be cut back. Needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances."

He said it was the "the biggest annual spending cut in history".

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With bigger battles ahead, over the 2012 budget, the debt ceiling and the deficit, President Obama has yet to explain how he will fund hope and pay for change”

End Quote Mardell's America Mark Mardell, BBC North America editor Mr Obama used his weekly radio address on Saturday to reinforce his message, saying that "beginning to live within our means is the only way to protect the investments that will help America compete for new jobs".

The BBC's Mark Mardell in Washington says Mr Obama has put a gloss on the measures, but they are a victory for the Republicans.

Our correspondent says the battles yet to come over the 2012 budget and long-term plans to cut the deficit are likely to be much more difficult.

John Boehner: 'It had been a long fight'

Announcing the deal, House Speaker John Boehner, a leading Republican, said it had been a "long fight".

"We fought to keep government spending down because it really will create a better situation for job creators," he said.

But in the Saturday Republican radio address, House Budget Committee chairman Paul Ryan said a crisis could be looming.

"Unless we act soon, government spending on health and retirement programmes will crowd out spending on everything else, including national security. It will literally take every cent of every federal tax dollar just to pay for these programmes."

Without an agreement by midnight on Friday, the government would have been forced to shut down, barring some 800,000 government employees from working.

The last US government shutdown came in 1995 amid a dispute between the Republican Congress and Democratic President Bill Clinton's White House.

The shutdown lasted for 20 days and was estimated to have shaved one percentage point off US economic growth for one quarter of the year.

During the current stand-off, talks were stalled for days as Republicans - urged on by the fiscally conservative Tea Party movement - pushed for larger budget cuts than Democrats were willing to concede.

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VIDEO: Government narrowly avoids voting bill defeat

The government has narrowly avoided a fourth Lords defeat on the Parliamentary Voting System and Constituencies Bill, as peers rejected a Labour amendment aiming to retain the current system of public inquiries for changes to constituency boundaries by 266 votes to 262.

The bill provides for a referendum on changing the electoral system for the House of Commons from first-past-the-post to the alternative vote, allows for parliamentary constituency boundaries to be redrawn and for the number of MPs to be cut from 650 to 600.

On 8 February 2011, day two of report stage, after Labour's amendment was defeated, the government proposed a less formal system of "public hearings", which was then accepted without a vote.

Labour opposes the proposed boundary changes and plans for a smaller size of Commons.

The Electoral Commission has said the bill must become law by 16 February or the AV referendum will be delayed.

Watch part two and three of the debate here and here.

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Scottish government budget passed

9 February 2011 Last updated at 17:08 GMT From Democracy Live: MSPs pass the Budget Bill at decision time.

The minority Scottish government's £33bn budget has been passed by MSPs, after a series of last-minute concessions to opponents.

Finance Secretary John Swinney agreed to demands from the Lib Dems and Tories to boost support for youth employment, private sector projects and housing.

The SNP minister told parliament the measures were fully-funded without "detriment" to the spending plans.

The Scottish budget is being reduced by about £1bn after Treasury funding cuts.

The Budget Bill was passed by 79 votes to 48. Labour refused to support the plans.

Mr Swinney - who faced opposition claims that the budget, as it stood, failed to promote economic recovery - said a record 25,000 modern apprenticeships would now be delivered.

The finance secretary said he was providing an extra £15m for college bursaries between 2010 and 2012 and an extra £8m to back 1,200 more college places in 2011-12.

Continue reading the main story Deliver a total of 25,000 modern apprenticeshipsAn extra £15m for college bursaries between 2010-12Boost college places by 1,200 with an extra £8m£10m to help small firms recruit more staff£16m more for housing in 2011-12Freight Facilities Grant boosted by £2mEdinburgh capital city supplement up by £400,000.And he said an extra £10m would go to helping small businesses take on more workers.

Housing programmes will also get a £16m boost in 2011-12, the finance secretary added.

Mr Swinney told parliament: "I believe we have prepared a budget that best meets the needs of the people of Scotland.

"The government has listened to the calls that others have made of it and we responded in the spirit of building consensus across the chamber.

"At a time when businesses and households across Scotland are acting to set their own finances in order at this most challenging of times, it is essential for this parliament to do likewise."

Labour finance spokesman Andy Kerr said rising unemployment was the "signal failure" of four years of SNP government.

"Our focus today, tomorrow and the day after must be jobs, jobs, jobs," said Mr Kerr.

He added: "That is the priority of our constituents and the need of the country.

Continue reading the main story Brian Taylor Political editor, BBC Scotland

The budget duly carried by 79 votes to 48, with no abstentions.

The wind-up speeches continued the argument between the SNP and Labour.

For Labour, David Whitton argued that the budget fell short of what was required to boost the economy and jobs.

Closing the debate, John Swinney accused Labour of "hypocrisy", arguing that he had conceded - or exceeded - each of the requests made directly to him by Labour in negotiations.

"The recovery of our economy is critical for every Scot - but no Scot could fail to be critical of the lack of economic foresight in this budget."

Conservative Derek Brownlee said: "This budget is a compromise - and it is the better for that.

"It is obvious it is not a Labour budget - it balances, and doesn't add another £200bn to national debt.

"This government - as its predecessor did - proclaims that growing the Scottish economy is its top priority - we did not feel that aim shone through the original draft budget."

Jeremy Purvis, the Lib Dem finance spokesman, added: "This is a better budget.

"It's better for young people wanting the skills they and we need for the economy, it's better for colleges that will able to provide more opportunities, and it's better for businesses that will have more opportunities to take on apprentices."

Green MSP Patrick Harvie said the budget passed only because the SNP had found enough votes, rather than on the basis of parliamentary "consensus".

Mr Swinney has already had to cover a £30m hole in the budget - the SNP's last before the May Scottish election - after failing to win enough support for his proposed tax on large retailers.

The finance secretary outlined several areas where the concessions could be paid for, including higher-than-expected income from non-domestic rates and an increase in the amount of cash to be carried forward to next year's budget.

The SNP budget will see cuts to spending and a public sector pay freeze, as well as a 3% "efficiency savings" target.

The finance secretary said he would shield local authorities from cuts if they agree to implement key SNP policies, including continuing the council tax freeze and maintaining police officer numbers - boosted by 1,000 since the SNP came into power in 2007.

NHS spending is protected, although there is a pledge to reduce the number of senior managers in the health service by 25% over the next four years.

Mr Swinney said the budget involved a £2.5bn infrastructure investment programme in health, education and transport.

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