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The US Capitol in Washington DC. AP Photo/J. David Ake
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US budget passes crucial vote

Terse negotiations over budget which includes $38bn in public spending cuts will now go forward for a Senate vote.

THE US HOUSE OF REPRESENTATIVES has passed the controversial budget agreement which includes some $38bn (€26.2bn) in spending cuts, by a vote of 260 to 167.

Eighty-one Democrats joined their Republican colleagues in voting to pass the budget, the Huffington Post reports.

A federal government shutdown has seemed increasingly likely as negotiations between the two parties dragged on, until a short-term agreement was reached at the weekend.

The cuts proposed in the budget bill include community health programmes as well as grants for police services and community development.

The bill now goes to the Senate for voting and, if approved as expected, will be signed later today by President Obama.

Republicans have conceded that the deal reached falls far short of the necessary level of cuts, but say they believe they have succeeded in halting the upward spiral of spending. House Speaker and head of the Republican negotiators John Boehner said “it stops the bleeding.”

“Does it cut enough? No. Do I wish it cut more? Absolutely,” he said.

Long-term deficit issues

The cuts are unlikely to make much impact on the the overall deficit by the end of this fiscal year, and further negotiations are due to start later today on longer-term budgetary measures for 2012 and beyond.

Reuters reports that Obama has called for a $4 trillion deficit reduction over 12 years or less, while Republican Congressman Paul Ryan has outlined a plan to reduce it by $4.4 trillion in ten years.

Obama has called on all Americans to share the burden of deficit-reduction and also suggested increased taxes on the wealthy, the BBC reports, while Ryan’s plan sees lower taxes for the wealthy and requires higher healthcare contributions by the elderly.

The president’s tax suggestion is an issue which sharply divides Republican and Democratic voters, according to a recent Gallop poll. Sixty-nine per cent of the former say they are opposed to increased tax on the wealthy, while 71 per cent of Democrats polled support such a move.

Given the Republican domination of the House, Ryan’s plan is expected to be approved.

- Additional reporting by the AP

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