113th Congress in Washington.
(photo credit: REUTERS)
WASHINGTON – The US Congress settled on a deal to reopen the federal government
and avoid default on America’s debt just hours before the Treasury Department
would have lost its authority to borrow money.
Senate Majority Leader
Harry Reid and Minority Leader Mitch McConnell forged an agreement whereby the
US government will be funded until January 15, and its borrowing limit will be
extended through February 7.
At press time, the deal was awaiting
approval in both the Senate and the House of Representatives, but leaders from
both parties implied it would go through. It was expected to pass late at night,
clearing the way for it to arrive on President Barack Obama’s desk to sign
before the deadline on Thursday.
Fitch Ratings, one of the three main
global credit ratings agencies, warned Congress this week that its paralysis
might lead Fitch to lower it evaluation of America’s
But markets, evidently numb to the politics of
Washington, barely slipped through the crisis and rallied on Wednesday upon word
that a deal had been reached.
Congress has never come so close to
breaching the debt ceiling ($16.7 trillion before the deal) as it has over the
past 16 days, since Congress first failed to pass a resolution that would fund
operations of the federal government.
A failure to reach a deal would
have meant the US risked defaulting on its payments for the first
NASA has virtually shut its doors over the past two weeks, as has
the Nuclear Regulatory Commission and the National Institutes of Health. The
government shutdown led to over 800,000 furloughs.
Republicans in the
House of Representatives refused to entertain a bill that would reopen the
government without fundamental changes to the Affordable Care Act, or
“Obamacare,” Obama’s signature legislation.
Leading that fight was Sen. Ted Cruz of Texas. On Wednesday, he
criticized the agreement that would avoid default, while declining the
opportunity to delay its passage with a filibuster.
The deal “provides no
relief for Americans from Obamacare,” Cruz said.
Indeed, it makes only
cosmetic changes to the health law, requiring income verification for those
registering for insurance.
The measure has bipartisan
Seventy-four percent of Americans disapprove of how the
Republican Party handled the crisis, according to an ABC/Washington Post poll
released on Monday. Fifty-three percent disapprove of how Obama handled the
House of Representatives Speaker John Boehner faced an important
political test as the crisis came to an end. The speaker was challenged to break
the Hastert Rule, the principle that no speaker should bring to a vote a bill
that does not have majority support within his party’s caucus.
months, Boehner said he would not let the US default on its obligations. He
repeated that commitment throughout the government shutdown, nearly every day,
until the day before the debt deadline.