Congress Hugs It Out, Government Shutdown Avoided

Compromise is reached on $1 trillion budget for 2012

This past April, Congress came within almost an hour of a shutdown of the federal government because they couldn't agree on a budget for the year. Last night, under the looming threat of another shutdown, Congress found common ground on a budget to fund them through next year to the tune of a $1 trillion.

The holdup was that President Obama told Congress that the spending bill should be held off until they figured out how to pay for an extension of the payroll tax cuts. The problem with that was that if Congress didn't come up with a spending plan by midnight tonight, then the federal government would have come to the end of their current spending budget and all departments and agencies would have closed shop tomorrow.

This is the third time this year a major government shutdown crisis was threatened and saved at the last second. Federal employees must have suffered numerous panic and anxiety attacks this year as their jobs were persistently on the line -- especially this time, almost a week before Christmas.

The payroll tax cut extension still hasn't been resolved, but Obama unyoked the spending plan from the payroll tax cuts allowing Congress to move forward with negotiations under a bit less tense climate. But that deal is closer to being solved, especially since Democrats have dropped their demand that the tax cuts be paid for with a tax on millionaires -- a proposal that Republicans flat-out rejected.

As for next year's budget, here's a few things we can expect under the current compromise:

• $233 million cut from the Environmental Protection Agency
• National Institutes of Health $300 million funding increase
• Department of Education's Race to the Top program funding drops 21%
• Pentagon gets a $5.1 billion increase for defense spending
• An increase in Global Health and overseas AIDS spending