* U.S. agencies, programs funded through Sept. 30
* No government shutdown next week, budget fights eased
* Argument shifts to Republican, Democratic budget plans
By David Lawder
WASHINGTON, March 21 The U.S. House of
Representatives eliminated the threat of a government shutdown
next week, approving on Thursday a stop-gap funding bill that
temporarily eases partisan tensions after months of bitter
fights over budgets.
In a rare show of cooperation, the Republican-controlled
House voted 318-109 to approve legislation that keeps government
agencies and programs funded through the end of the fiscal year
on Sept. 30.
The debate over how to shrink U.S. deficits now shifts to
rival budget plans from Republicans and Democrats for the 2014
fiscal year starting on Oct. 1.
Just before the government funding vote, the House passed
Representative Paul Ryan's plan to balance the budget in 10
years through deep cuts to healthcare and social programs while
lowering tax rates.
Senate Democrats' plan, which raises tax revenue and calls
for more modest cuts to aid job growth, is expected to pass in
the Senate on Friday.
While the two parties' blueprints are vastly different,
lawmakers were encouraged by bipartisan cooperation shown in
avoiding a damaging government shutdown.
Both parties have been chastened by bruising budget fights
like the "fiscal cliff" negotiations that went down to the wire
in January, and the failure by Congress and the White House to
halt the automatic spending cuts triggered on March 1.
"We proved that when we set our mind to it, we can get
complicated, hard things done," said House Appropriations
Committee chairman Harold Rogers, a Kentucky Republican.
But another showdown looms this summer over raising the
federal debt limit.
House Speaker John Boehner said he would use the next debt
limit increase deadline - likely in late July or early August -
to demand more spending cuts and major changes to the federal
healthcare and retirement programs.
'DOLLAR FOR DOLLAR'
He wants any increase in the federal borrowing cap to be
matched by an equal amount of spending cuts, setting up
potential repeat of the 2011 debt-limit brawl that cost the
United States its top-tier credit rating.
"Dollar for dollar is the plan," Boehner told reporters
after the House votes.
Republicans chose not to use the March 27 expiration of
spending authority and a potential agency shutdown as a leverage
point to demand more spending cuts. Instead, they want to wage a
campaign for deficit reduction centered on proposals by Ryan,
the House Budget Committee chairman.
Shortly before approving the spending bill, the House backed
a blueprint offered by the Wisconsin lawmaker to eliminate U.S.
deficits within 10 years through deep cuts in healthcare and
spending on other social safety-net programs.
The funding bill for the rest of this fiscal year, which the
Democratic-led Senate approved on Wednesday, keeps in place $85
billion in automatic spending cuts, known as the "sequester."
But it takes some of the sting out of those cuts by allowing
the military and several domestic agencies to move around some
money within their reduced budgets.
The Defense Department, for example, will be able to shift
to operations and maintenance some $10 billion that would
otherwise be locked in outdated, unwanted budget accounts.
The House vote prompted the Pentagon to announce a two-week
delay in any decisions on how much of its 800,000-strong
civilian workforce would be put on unpaid leave due to its $46
billion share of the automatic cuts. Officials want to analyze
the measure's impact.
The funding package will now be sent to President Barack
Obama to be signed into law.
Ryan's budget, marked by repeal of Obama's healthcare
reforms and deep spending cuts to the Medicaid insurance system
for the poor and other programs, will define Republicans'
positions in the rest of this year's fiscal battles and in
congressional elections in 2014.
It will be matched by Democrats' plan from Senate Budget
Committee Chairman Patty Murray, which calls for $1 trillion in
additional tax revenues, $100 billion in new infrastructure and
jobs spending and modest cuts to health care programs.
And during the week of April 8, Obama will weigh in with his
own budget request, two months after it was due.
The House voted 221-207, largely along party lines, to
approve Ryan's nonbinding budget resolution, with all Democrats
and 10 Republican conservatives opposing it.
Senate Democrats later put Ryan's plan to a vote in that
chamber, where it was defeated 40-59, with five Republicans
joining majority Democrats in voting against it.
The latest Ryan budget, like the previous versions that
solidified his position as the Republicans' fiscal guru and
helped him become the party's vice presidential candidate last
year, proposes major changes to the Medicare healthcare program
for the elderly.
This popular but increasingly expensive program would be
converted to a voucher-like system of subsidies for older
Americans to buy private health insurance or coverage through
the traditional Medicare program.
Democrats complained the Ryan plan would crush near-term
economic growth for the sake of an arbitrary goal of reaching
balance in 10 years.
"It adopts the European-style austerity approach that we've
seen slow down economies in many parts of Europe," said
Democratic Representative Chris Van Hollen of Maryland, the top
Budget Committee Democrat. "We should instead be focusing on job
growth and putting people back to work."
Ryan countered that Democrats are not serious about taming
the growing U.S. debt of $16.7 trillion.
"We want to balance the budget. They don't. We want to
restrain spending, they want to spend more money," Ryan said of
The Democrats' budget plan envisions deficits in the $400
billion to $600 billion range through the next decade, but
maintains that these will average 2.4 percent of U.S. economic
output, a level many economists view as sustainable.
The Democrats' budget seeks $1 trillion in new tax revenues
by sharply curbing tax breaks for the wealthy and proposes $100
billion in new spending on infrastructure and job training.
It aims to replace the automatic spending cuts, half with
revenues and the rest with other cuts, and offers only modest,
undefined spending reductions to healthcare, while keeping the
structure of social safety-net programs largely unchanged.