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Late deal helps US avoid shutdown

United States President Barack Obama and congressional leaders struck a last-minute budget deal on Friday to narrowly avert a government shutdown that would have hit the economy and idled hundreds of thousands of workers.

world Updated: Apr 09, 2011 22:09 IST

United States President Barack Obama and congressional leaders struck a last-minute budget deal on Friday to narrowly avert a government shutdown that would have hit the economy and idled hundreds of thousands of workers.

With a little over an hour to spare before a midnight deadline, Obama’s Democrats and opposition Republicans agreed to a bitterly fought compromise plan that will cut about $38 billion in spending for the rest of the fiscal year.

Congress then quickly approved a stopgap funding measure to keep the federal government running into next week until the budget agreement can be formally approved.

A shutdown — the first in more than 15 years — would have weakened the US economic recovery, forced furloughs for some 800,000 federal employees, closed national parks and monuments and even delayed paychecks for troops in Afghanistan and Iraq.

But the biggest incentive for a deal may have been the risks that failure would have posed for Obama, his Democrats and the Republicans just as the 2012 presidential election campaign gathers steam.