Congress leaders reach $1.66tn deal on US spending levels ahead of feared shutdown

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Republican and Democratic leaders on Capitol Hill have reached a $1.66tn agreement on the level of US federal spending for 2024, in a breakthrough that moves Congress one step closer to avoiding a costly government shutdown.

The news was jointly announced on Sunday by Chuck Schumer, the Democratic Senate majority leader, and Mike Johnson, the Republican Speaker of the House.

The framework agreement comes with less than two weeks to go until a government deadline. Funding for several parts of the federal government is set to run out on January 19, and for others on February 2, unless the two sides can hammer out more detailed budget bills.

Any final deal will need to be passed by the Democrat-controlled Senate and the Republican-controlled House, and signed into law by President Joe Biden.

The budget negotiations are separate from a supplementary request from Biden for billions of dollars in additional foreign aid for Ukraine and Israel.

In a joint statement with Hakeem Jeffries, the top House Democrat, Schumer said the framework agreed on Sunday “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”.

In a letter to Republican colleagues on Sunday afternoon, Johnson said Republicans had “secured hard-fought concessions”, including $10bn in cuts to the Internal Revenue Service and a clawback of $6.1bn in unused Covid-19 pandemic relief funds.

“The result is real savings to American taxpayers and real reductions in the federal bureaucracy,” Johnson said.

Biden also welcomed the news, saying in a statement that the funding framework “moves us one step closer to preventing a needless government shutdown and protecting important national priorities”.

But the deal is likely to come under attack from hardliners in Republican ranks who have pushed for steeper budget cuts and could wield outsized influence over the process.

Republicans control the House by a razor-thin margin after the departure of several members of Congress, including former Speaker of the House Kevin McCarthy, in recent weeks.

McCarthy was ousted as Speaker in part due to fellow Republicans’ distaste for a deal he struck last year with Biden on government funding. The framework announced on Sunday largely keeps funding levels on a par with what McCarthy and Biden agreed.

Johnson acknowledged on Sunday that the new spending levels would “not satisfy everyone” and “do not cut as much spending as many of us would like”. But he said the latest framework provided a “path to . . . move the process forward” and “fight for the important policy” priorities of House Republicans.