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Sources: White House, Congress reach budget deal

By Major Garrett
CNN White House Correspondent

WASHINGTON (CNN) -- The White House and Congress have reached a deal on next year's budget, one that gives President Bush all of his requested $18.4 billion boost in defense spending and provides $4 billion more for education than the White House originally requested, administration and congressional sources tell CNN.

The deal clears the way for passage of all spending bills this year and constitutes a major achievement for the White House and Congress in maintaining the bipartisan cooperation that has defined relations between the two since the September 11 terrorist attacks.

The White House and Congress also hope the deal will prove both sides can handle the fundamentals of government even as they swiftly draft a wide array of legislation to respond directly to the terror attacks.

Congress and the White House are continuing intense negotiations on a counter-terrorism bill, an airline security bill, an economic stimulus bill and an aid bill for workers who lost jobs, as well as health care coverage.

The deal, which sets in motion final action on the entire discretionary federal budget, was sealed when President Bush agreed to send a letter to Congress outlining his support for $25 billion more in federal spending than his first budget sought.

Rep. Bill Young, R-Florida, chairman of the House Appropriations Committee, and his counterpart, Rep. David Obey, D-Wisconsin, lobbied for an official White House request -- known as a budget amendment -- for the extra spending before signing off on the deal.

That White House budget amendment did not, in the end, materialize, but Bush did send a letter acknowledging his support for more spending.

Obey and Young were still in a mood to resist but were told to accept the deal by GOP and Democratic leaders, congressional sources said. The White House and congressional leaders were expected to announce the deal as early as Tuesday.

Bush retains veto rights

In the letter, which CNN has obtained, Bush retains the right to veto spending bills that contain policy riders he disagrees with, but says "there will be no disagreement between Congress and the administration over funding levels."

The president does not specifically request higher spending in the letter, but acknowledges a "bipartisan agreement" on the 2002 budget.

"If the Congress presents appropriations bills to me that comply with this aggregate spending level, and are otherwise acceptable, then I will sign them," the letter read.

As early as last week, House Minority Leader Richard Gephardt had agreed to the deal, as had Senate Majority Leader Tom Daschle, but Obey and Young balked.

Obey was especially vocal, sources said, citing fears that Democrats would be blamed for excess spending next year.

But sources said when it became clear Bush and the congressional leadership were going to move forward without him, Obey relented.

"We're going forward," said David Sirota, Obey's spokesman. "This isn't all we wanted but we're not going to hold up the whole process."

The extra $25 billion will be allotted as follows: $18.4 billion in increased defense spending; $2.2 billion for emergency spending related to tropical storms and summer wildfires, and an extra $4 billion for education Under the agreement, the total discretionary spending budget for 2002 will be $686 billion.

The deal prevents any partisan clash over the budget this year. Congress will now try to move all 13 spending bills.

Congress has passed and Bush has already signed a continuing resolution that keeps the government operating until October 16. Congress will probably need more time to finish work on all the spending bills, congressional sources said.

Education reform seen closer

The deal on education spending also paves the way for passage of Bush's education reform bill. Lawmakers working on the reforms have been waiting for an agreement on additional education spending before proceeding.

White House and congressional sources say House and Senate negotiators hope to finish the bill, which includes new testing requirements and yearly measurements of school district performance, by the middle of October.

The education boost will bring spending to $48.5 billion in 2002, a 16 percent increase over the 2001 budget.

In his letter, Mr. Bush praises Congress:

"This agreement and aggregate spending level are the result of a strong bipartisan effort at this critical time for our nation, and I expect that all parties will now proceed expeditiously and in full compliance with the agreement."



 
 
 
 



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