House, Senate release bipartisan agreement on government funding as shutdown deadlines loom

House and Senate negotiators reached an agreement on a government funding top line Sunday, taking a critical step toward avoiding a shutdown later this month. 

The bipartisan deal will set the federal government's discretionary spending at a maximum level of $1.59 trillion, Speaker Mike Johnson, R-La., wrote in a letter to colleagues. It would include $886 billion for defense and $704 billion for nondefense spending, Johnson said.

The $1.59 trillion figure was part of an agreement mandated by the Fiscal Responsibility Act (FRA) last year, a compromise reached during debt limit talks between President Biden and then-Speaker Kevin McCarthy, R-Calif.

Democratic leaders said the final top line would also include an additional $69 billion in nondefense discretionary spending that was part of a McCarthy and Biden side deal at the time. That would bring the total to roughly $1.66 trillion.

Johnson said the new agreement would see some additional cuts to discretionary spending to offset the deal.

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Senate Majority Leader Chuck Schumer, left, and House Speaker Mike Johnson, right, reached an agreement on government spending (Getty Images)

"As has been widely reported, a list of extra-statutory adjustments was agreed upon by negotiators last summer. The agreement today achieves key modifications to the June framework that will secure more than $16 billion in additional spending cuts to offset the discretionary spending levels," Johnson's letter said.

"As you know, the Senate marked up their appropriations bills $14 billion above the FRA levels and the adjustments. The agreement reached today thus allows for none of that funding, and combined with the additional savings described above, results in an overall $30 billion total reduction from the Senate’s spending plans."

A GOP aide stressed that the top line agreement would ultimately be a cut to the McCarthy-Biden agreement struck last spring.

"This deal has the same levels of spending as the FRA deal except with billions more in cuts. Republicans put the screws to Democrats one more time," the aide told Fox News Digital. 

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Johnson conceded in his letter that "these final spending levels will not satisfy everyone, and they do not cut as much spending as many of us would like" but added, "his deal does provide us a path to: 1) move the process forward; 2) reprioritize funding within the topline towards conservative objectives, instead of last year’s Schumer-Pelosi omnibus; and 3) fight for the important policy riders included in our House FY24 bills."

Their agreement will see discretionary spending at the levels agreed upon by President Biden and ex-Speaker Kevin McCarthy (Chris Kleponis/CNP/Bloomberg via Getty Images)

Democrats also took a victory lap when announcing the deal. Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y., released a statement on Sunday touting that the agreement "clears thew way for Congress to act over the next few weeks in order to to maintain important funding priorities."

But there is still a showdown looming on the horizon – Johnson made clear that he still wants conservative policy riders included in the final spending agreement. 

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Schumer and Jeffries took a shot at Johnson's effort in their statement, "we have made clear to Speaker Mike Johnson that Democrats will not support including poison pill policy changes in any of the twelve appropriations bills put before the Congress."

House Minority Leader Hakeem Jeffries and Schumer took a victory lap over the deal (Photo by Anna Moneymaker/Getty Images)

President Biden took a similarly hostile posture toward House Republicans even while holding the deal up as a win.

"It reflects the funding levels that I negotiated with both parties and signed into law last spring. It rejects deep cuts to programs hardworking families count on, and provides a path to passing full-year funding bills that deliver for the American people and are free of any extreme policies," he said of the deal.

"Now, congressional Republicans must do their job, stop threatening to shut down the government, and fulfill their basic responsibility to fund critical domestic and national security priorities, including my supplemental request. It’s time for them to act."

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Current government funding levels expire partially on Jan. 19, with remaining agencies and offices funded through Feb. 2.

Meanwhile, a growing contingent of GOP hardliners is calling on House Republican leaders to block government funding progress altogether until Democrats make conservative policy concessions to deal with the border crisis.