Democratic and Republican lawmakers announced a bipartisan Senate deal Wednesday to end the government shutdown and extend the US debt ceiling to February 7. The US Congress passed the bill with hours to spare before the nation risked default.
Senate Majority Leader Harry M. Reid, a Democrat, and Republican Minority Leader Mitch McConnell announced a bipartisan deal on Wednesday to bring an end to a 16-day-old government shutdown and raise the nation's debt limit through February 7, staving off a potentially disastrous US debt default.
The legislation must now be formally passed by both the Democrat-led Senate and the Republican-controlled House of Representatives before being signed by President Barack Obama, who has urged both houses to act swiftly to approve the measure.
The Republicans' congressional leader, House Speaker John Boehner, released a statement saying that his party would not seek to forestall the deal, saying that: "[Blocking] the bipartisan agreement reached today by the members of the Senate will not be a tactic for us".
Republican Senator Ted Cruz, who led the opposition to any deal unless it also defunded Obama's healthcare reform, also said he would not delay consideration of the measure, which is expected to be voted on later in the day.
US Senate leaders had returned to bipartisan negotiations Wednesday in a fresh attempt to end the shutdown and stave off a possible debt default just hours before the midnight deadline, after efforts by the Republican-controlled House of Representatives to find a compromise collapsed in internal disagreement a day earlier.
Bitter fighting over the budget and debt ceiling has had serious consequences for the United States in recent weeks. Hundreds of thousands of federal employees have been furloughed, or sent home without pay, as a result of the government shutdown, while stock markets have also taken a hit.
Under the terms of the Senate deal, the debt limit would be extended until February 7, though the Treasury Department would be able to temporarily extend its borrowing capacity beyond that date if Congress failed to act early next year. Government agencies would be funded through January 15.
A rocky road to compromise
Uncertainty over Washington’s ability to avert a default led Fitch Ratings to warn it could cut the sovereign credit rating of the United States from AAA, citing the political brinkmanship over raising the federal debt ceiling.
House Republicans twice tried to come up with a new compromise but failed to satisfy Obama, Senate Democrats or Tea Party conservatives who are determined to win changes to the president’s healthcare law, also known as “Obamacare,” before they will agree to concessions on the budget.
The first House Republican attempt was shot down in a closed-door meeting that had begun with members singing the hymn “Amazing Grace”.
The second plan was scuttled hours before it was expected to hit the House floor for a vote after the influential Heritage Action for America, a conservative group, urged a “no” vote because it did not do enough to stop Obama’s healthcare law.
If Congress fails to reach a deal by Thursday, checks would likely go out on time for a short while for everyone from bondholders to workers who are owed unemployment benefits. But analysts warn that a default on government obligations could quickly follow, potentially causing the US financial sector to freeze up and threatening the global economy.
The Treasury Department seized on Fitch’s downgrade threat to press Congress. “The announcement reflects the urgency with which Congress should act to remove the threat of default hanging over the economy,” a Treasury spokesperson said.
After the Fitch announcement, S&P 500 futures fell 9.6 points while Dow Jones industrial average futures sank 60 points and Nasdaq 100 futures fell 7.5 points.
Numerous polls show Republicans have taken a hit in public opinion since the standoff began and the government partially closed. A Washington Post/ABC News poll released on Monday found that 74 percent of Americans disapprove of the way congressional Republicans have handled the standoff, compared with a 53 percent disapproval rating for Obama.
Another survey released by Gallup on Tuesday showed American confidence in the US economy fell another five points last week as the government shutdown continued.
(FRANCE 24 with wires)
Date created : 2013-10-16