SCOTT SIMON, host:
This is WEEKEND EDITION from NPR News. I'm Scott Simon.
And the U.S. government is still operating this morning. President Barack Obama and congressional leaders struck a deal last night to avoid a partial government shutdown. With barely an hour to go before funding expired, word came from the U.S. Capitol that an agreement had been reached.
In exchange for Democrats agreeing to spending cuts, Republicans dropped most of the social and environmental policy restrictions they had sought to include in a measure that funds the government through September. NPR's David Welna has the report from the Capitol.
DAVID WELNA: It was 10:30 at night when negotiators say they finally shook hands on a deal to keep the federal government from shutting down. In another half-hour, the shutdown would have begun, and some 800,000 federal employees would have faced furloughs.
Minutes later, House Speaker John Boehner left a closed-door gathering of House Republicans, where he'd fleshed out the terms of the deal and announced that the government would not, after all, be shutting down.
Representative JOHN BOEHNER (Republican, Ohio, Speaker of the House): As you all know, this has been - a lot of discussion, and a long fight. But we fought to keep government spending down because it really will, in fact, help create a better environment for job creators in our country. Thank you.
WELNA: Boehner took no questions, and left quickly. He had avoided the shutdown, but it had come at a price. Republicans would not be getting the $61 billion in spending cuts that they'd approved, but would instead have to settle for the $38.5 billion worth of cuts that aides say was the most President Obama was willing to agree to.
Speaking in a broadcast from the White House, the president called the deal a worthwhile compromise.
President BARACK OBAMA: This agreement between Democrats and Republicans, on behalf of all Americans, is on a budget that invests in our future while making the largest annual spending cut in our history.
WELNA: It was also a happy ending to a politically perilous standoff for a president who's just launched a bid for a second term in office. But Mr. Obama acknowledged that he, too, had paid a price to get a deal.
Pres. OBAMA: Some of the cuts we agreed to will be painful. Programs people rely on will be cut back; needed infrastructure projects will be delayed. And I would not have made these cuts in better circumstances. But beginning to live within our means is the only way to protect those investments that will help America compete for new jobs.
WELNA: The spending cuts were a bitter pill to swallow for Senate Majority Leader Harry Reid as well, but he cast them as a good start for going after deficit spending.
Senator HARRY REID (Democrat, Nevada, Majority Leader): What we've done has been difficult but important for the country. We all agree that there are many cuts that have to take place in the future. We understand them. We must get this country's fiscal house in order.
WELNA: President Obama and Reid did hold the line against dozens of policy riders that Republicans had sought to include - efforts to defund everything from the new health-care law to Planned Parenthood, to National Public Radio. The House Republicans' insistence on including such provisions in the spending bill had drawn criticism earlier in the day from some of their GOP Senate colleagues, including Tennessee's Bob Corker.
Senator BOB CORKER (Republican, Tennessee): It's powder puff. We've got our nation at stake and we're sitting here, you know, yelling at each other, saying things we shouldn't be saying to each other, that take us nowhere - over powder puff.
WELNA: Earlier this morning, the House gave final passage to a short-term spending bill that keeps the federal government funded into next week. It cuts $2 billion in spending, and gives Congress time to enact the deal reached last night for the rest of the fiscal year.
Senate Minority Leader Mitch McConnell expressed the relief that Republican and Democratic lawmakers alike felt at heading off a shutdown.
Senator MITCH MCCONNELL (Republican, Kentucky, Minority Leader): We had an opportunity tonight to decide whether we wanted to repeat history or make history. Had we chosen to repeat history, we would have allowed a government shutdown. Instead, we decided to make history.
WELNA: But while the spending cuts agreed upon may be historic, McConnell warned Republicans will be demanding much bigger reductions in next year's budget.
David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright National Public Radio.