U.S. President Barack Obama congressional leaders reached a last-minute budget deal on Friday, averting a government shutdown, Republican lawmakers said.
With a midnight deadline looming for a government closure, the compromise between Obama's Democrats and opposition Republicans requires lawmakers to approve stopgap funding to keep federal agencies running into next week until the budget agreement can be formally enacted.
Republican Congressman Devin Nunes told Reuters that 'the deal' - a plan for $39 billion in spending cuts - was presented to House Republicans at a closed-door meeting and that most members would vote for it. There was no immediate comment from the White House or congressional Democrats.
A shutdown would have idled hundreds of thousands of workers, potentially put a crimp on the U.S. economic recovery, and carry political risks for Obama and his fellow Democrats as well as opposition Republicans, who would be seen by voters as failing to make compromises.
Obama's aides and U.S. lawmakers had struggled for a deal over government funding for the rest of the fiscal year, which ends September 30. But the two sides even had a hard time agreeing on what issues were holding up an agreement.
Democrats said they were at odds over federal funding for birth control. Republicans said spending cuts were the issue.
After narrowing their differences, the House was set to vote later on Friday night on a short-term funding bill to keep the government running until the longer budget plan can be enacted into law sometime next week, the Republican lawmakers said.
Without an agreement, money to operate the federal government for the next six months would run out at midnight on Friday and agencies such as the Internal Revenue Service would begin a partial shutdown.
A phone call between Obama and House of Representatives Speaker John Boehner, the top Republican in Congress, yielded 'no resolution', a Republican aide said.
Despite the apparent resolution of the impasse, the bitter political fight raised questions about the ability of Obama and a divided U.S. Congress to deal with bigger issues looming down the road, from raising the federal debt ceiling to reining in budget deficits, as the 2012 presidential election campaign gathers steam.
"They've got to be laughing at us right now" in China, said Senate Foreign Relations Committee Chairman John Kerry. "How terrific that the United States of America can't make a decision."
The leadership of the world's lone remaining superpower has been consumed for days by the budgetary infighting that could bring large swathes of government to a standstill.