Political foes strike spending deal
President Barack Obama and congressional leaders have reached a historic, last-minute agreement just before a midnight deadline to slash about 38 billion US dollars in federal spending and avert the first federal government shutdown in 15 years.
Mr Obama hailed the deal as "the biggest annual spending cut in history".
John Boehner, the Republican speaker of the House of Representatives, said that over the next decade it would cut government spending by 500 billion US dollars, and won an ovation from his rank and file - conservative tea party adherents among them.
Amid the biggest clash yet between Democrats and the resurgent Republicans who control the House, Mr Obama had warned that a shutdown would damage the economy's recovery by putting an estimated 800,000 government employees out of work.
The political stakes of a shutdown were huge ahead of next year's presidential and congressional elections.
During the last government shutdown during Bill Clinton's presidency, Republicans got most of the blame in - but there was no assurance that would have happened again.
Since taking control of the House in January, Republicans have vowed to slash what they described as out-of-control spending and curb the federal deficit.
Democrats accused Republicans of wanting to cut vital government services and pushing a social agenda, while Republicans said Democrats were not serious about cutting spending.
The deal came together after six gruelling weeks and an outbreak of budget brinkmanship over the past few days as the two sides sought to squeeze every drop of advantage in private talks.
"This is historic, what we've done," agreed Democratic Senate Majority Leader Harry Reid, the third man involved in negotiations that ratified a new era of divided government.