2 Aug 2012

US budget deal reached

5:40 am on 2 August 2012

US Congressional leaders have agreed to keep funding the federal government until next March, narrowly avoiding a showdown over taxes and spending later in the year.

The deal, which would provide funding at an annual rate of $1.047 trillion, was announced by Senate majority leader Harry Reid (Democratic), House Speaker John Boehner (Republican) and President Barack Obama.

The BBC reports Congress has until 30 September to pass the resolution, thus avoiding a showdown between Mr Obama and his Republican opponent, Mitt Romney, in the run-up to the presidential election on 6 November.

Federal Reserve chairman Ben Bernanke said last month that the economy could suffer a recession early next year if Congress failed to come to an agreement.