US spending deal reached amid looming shutdown threat

Washington: US Congressional leaders have announced a spending deal for government funding this year in an effort to avert a partial shutdown as the deadline still looms, according to media reports.

The amount agreed to by Republican House Speaker Mike Johnson and Democratic Senate Majority Leader Chuck Schumer include $1.59 trillion for fiscal year 2024, with $886 billion for defence spending and $704 in non-defence spending, reports CNN.

The two leaders on Sunday also agreed to a $69 billion side deal in adjustments that will go toward non-defence domestic spending.

The deal now needs approval from the House of Representatives and Senate and they have less than two weeks to finalise funding and stop the suspension of some federal services, the BBC reported.

In a letter to his colleagues over reaching the deal, Speaker Johnson admitted that the amount of funding "will not satisfy everyone, and they do not cut as much spending as many of us would like".

In a joint statement, Schumer and Senate Minority Leader Hakeem Jeffrie said the agreement "clears the way for Congress to act over the next few weeks in order to maintain important funding priorities for the American people and avoid a government shutdown".

On his part, President Joe Biden said it "moves us one step closer to preventing a needless government shutdown and protecting important national priorities", reports the BBC.

Lawmakers are scheduled to resume negotiations in Washington on Monday following the year-end holiday break and have until January 19 to sort out funding for programmes including transport, housing and energy.

A second load of annual funding, for sectors including defence, is set to expires on February 2.

The agreement on an overall amount of spending comes after the government in October 2023 secured a short-term deal to avoid a federal shutdown temporarily, which was signed into law by President Biden minutes before the deadline.

Shutdowns normally occur when both chambers of Congress are unable to agree on the roughly 30 per cent of federal spending they must approve before the start of each fiscal year on October 1.