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No Government Shutdown: Officials Agree to Deadline Deal

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Barely more than an hour before a midnight deadline Friday night, officials announced a deal to avert a government shutdown.

"We will cut $78.5 billion below the president's 2011 budget proposal, and we have reached an agreement on the policy riders," House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., wrote in a joint statement.

The agreement would cut $38.5 billion from the 2010 budget and keep intact funding to Planned Parenthood, sources from both parties told ABC News.

"We protected the investments we need to win the future," President Obama said after the deal was struck. "At the same time, we also made sure at the end of the day this was a debate about spending cuts -- not social issues like women's health and the protection of our air and water. These are important issues that deserve discussion, just not during a debate about our budget."

The House and Senate passed temporary resolutions to keep the government funded beyond midnight, when it was scheduled to run out, until the full agreement could be drawn up and passed by Congress. That short-term bridge included the first $2 billion in cuts, officials said.

Though the House vote came after midnight, the Office of Management and Budget said there would be no shutting down of government agencies because agreement had been reached and funding was anticipated.

"I would expect the final vote on this to occur mid-next week," Boehner said. "This has been a long 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."

Senate Republicans pointed out that as recently as February, Democratic leaders denounced even more modest cuts than those in the deal as "draconian," "extreme" and "unworkable." They had to go the brink of a shutdown, the Republicans said but Boehner's hard line, in the end, forced Democrats to agree to several billion more in cuts.

However, Democratic officials tried to portray the deadline deal as one in which Boehner blinked. They argued the level of cuts were similar to what were discussed during a meeting at the White House the night before. The officials said Boehner came back during Friday asking for more cuts, but Obama refused.

Plus, money will not be taken from programs the president favors, such as Head Start, but instead from the automatic "mandatory spending" appropriated for departments such as the Pentagon and the Department of Transportation.

"They gave on the EPA, NPR, and Planned Parenthood riders," a Democratic official said.

However, the deal does include an abortion funding ban for Washington, D.C., which President Obama has signed into law before. And, bipartisan sources added, the agreement calls for the Senate to hold votes on rescinding the health care law and eliminating funding for Planned Parenthood.

Republicans added the agreement denies additional funding to the IRS, requires yearly audits of the Consumer Financial Protection Bureau and mandates additional study of the health care law that they believe will aid their fight to repeal it.

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