Senate OKs deal to avoid govt shutdown

The U.S. Capitol dome in Washington, August 2, 2011.

WASHINGTON (Reuters) - Senate approved a deal on Monday to avert a government shutdown and make billions of dollars of aid available to victims of recent disasters.

The complex agreement would end a standoff that has threatened disaster aid for thousands of Americans and imperiled government operations for the third time this year.

"We've averted a disaster -- until the next one," said Democratic Senator Ben Nelson.

The resolution, which passed on a bipartisan vote of 79 to 12, is not likely to quell concerns that Congress is unable to pass even basic legislation without a fight and lacks the stomach for tougher budget decisions in the coming months.

Republican and Democratic lawmakers had been deadlocked over whether additional budget cuts were needed to offset the additional disaster aid needed to help those displaced by one of the most extreme years for weather in U.S. history.

Earlier on Monday, the Federal Emergency Management Agency said its dwindling disaster fund could probably last until the end of the week, several days longer than previously thought.

That allowed Democrats and Republicans to drop their fight over how to pay for the additional aid.

The Democratic-controlled Senate was expected to approve a measure that would keep the government running on a temporary basis through November 18, giving lawmakers enough time to finalize spending bills for the fiscal year that starts on October 1.

That measure includes $2.65 billion for FEMA's disaster fund, which would be available on Saturday. FEMA's fund could run out before then, but the disruption would only last for a few days.

The Republican-controlled House of Representatives would have to approve the bill as well, but it is out of town on a weeklong break. So the deal includes a separate, short-term bill that would fund the government until the House returns.

Because it is technically still in session, the House could approve the short-term deal before the end of the fiscal year on September 30. A spokesman for House Speaker John Boehner declined to comment on the chamber's plans, but Republican Senator Roy Blunt, who maintains close ties to top House Republicans, said he expected it would pass.

Budget battles took the government to the brink of a shutdown in April and the edge of default in August, prompting a first-ever downgrade of the country's AAA credit rating.

FEMA will almost certainly have to ask Congress for additional disaster aid in the coming months, which could set off another round of partisan sniping.

(Editing by Doina Chiacu)