House approves US bipartisan budget Bill, avoids shutdown

   United States (US) House Budget Committee Chairman Representative Paul Ryan (left), a Republican from Wisconsin, speaks with Representative Nita Lowey, a Democrat from New York and the ranking Democrat on the House Appropriations Committ
   United States (US) House Budget Committee Chairman Representative Paul Ryan (left), a Republican from Wisconsin, speaks with Representative Nita Lowey, a Democrat from New York and the ranking Democrat on the House Appropriations Committee, as they go before the House Rules Committee as it considers the budget compromise struck last night by Mr Ryan and Senate Budget Committee Chair Senator Patty Murray, a Democrat from Washington, on Dec 11, 2013, on Capitol Hill in Washington. House lawmakers on Dec 12 resoundingly approved a two-year budget deal that repeals billions of dollars in painful automatic cuts and crucially avoids the prospect of a US government shutdown next year. -- FILE PHOTO: AP  

WASHINGTON - House lawmakers on Thursday resoundingly approved a two-year budget deal that repeals billions of dollars in painful automatic cuts and crucially avoids the prospect of a US government shutdown next year.

The agreement hammered out between top Democratic and Republican negotiators is seen as a chance to end the brutal cycle of fiscal crises that have plagued Washington in recent years.

The legislation, which passed 332-94 with sweeping bipartisan support, sets discretionary spending caps at US$1.012 trillion (S$1.27 trillion) for 2014 and US$1.014 trillion for 2015, and rolls back several arbitrary cuts - known as sequestration - that were to hit the Pentagon and domestic departments on Jan 1.

It also reduces the deficit by some US$23 billion - without raising taxes - by trimming waste and hiking some fees, including those imposed on air travellers.

Chief House budget negotiator Paul Ryan, last year's Republican vice-presidential nominee, sounded relieved that the constant budgetary brawling might be held at bay until 2015.

"We've been at each other's throats for a long time," Mr Ryan conceded. "I think it's about time, for once in a long time, we find common ground and agree, and that is what this Bill does."

The White House quickly hailed Thursday's bipartisan vote as "a positive step forward for the nation and our economy." But the deal, negotiated by Mr Ryan and Senate Democrat Patty Murray, notably does not address the debt ceiling, which will reach its limit in February.

In its final act of the year, the chamber also passed a massive defence authorisation Bill that lays out Pentagon spending for 2014, raises military wages by one percent, and also sets new policies for Guantanamo which ease the transferring of detainees back to their home countries.

Both Bills now head to the Senate for votes likely next week, before it too adjourns for the year-end holiday.

Some Senate Republicans, including Mr Ted Cruz, have already signalled they will oppose the deal, saying sequestration imposed painful but necessary cuts to help rein in runaway Washington spending.

"This proposal undoes the sequester's modest reforms and pushes us two steps back, deeper into debt," Mr Cruz said in a statement.

But House Speaker John Boehner, seeking to rally sceptical conservatives, said the deal "advances conservative policy" as much as could be expected in a divided government.

"Is it perfect? Does it go far enough? No, not at all," he said, adding that Washington needed to get a better handle on the debt, which currently stands at US$17.2 trillion. "But this budget is a positive step in that direction."

Congressional spending authority expires on Jan 15, and lawmakers will have just one week following the holidays to craft budgets for the Pentagon and other departments under the agreed framework.

The deal includes US$85 billion in mandatory savings and non-tax revenue, of which US$63 billion will go toward repealing about 30 per cent of sequestration cuts.

The agreement hikes "discretionary spending", which is the spending that Congress votes on including for many government agencies, for the next two years.

But it more than offsets those increases by slashing waste and adjusting what Ryan called "autopilot" expenses such as some pension schemes. The deal for example requires new federal employees to contribute more toward their retirement funds than current government workers.

Democrats loudly complained the deal does not close tax loopholes which they say favour special interests and wealthy Americans, nor does it extend unemployment insurance for the 1.3 million people who will see that element of their safety net expire on Dec 28 if Congress does not act.