With little time to spare before America’s ability to borrow or pay its debts expires, Senate Majority Leader Harry Reid (D-Nevada) and Senate Minority Leader Mitch McConnell announced a deal Wednesday to raise America’s debt limit until February 7 and end the government shutdown from now to January 15.
The deal calls for a bipartisan group made up of negotiators nominated by Congressional leaders– to be led by Democrat Senator Patty Murray (D-Washington) and Republican Senator Paul Ryan (R-Wisconsin)– that will craft a larger budget deal in December.
Reid and McConnell have been negotiating since attempts to organized talks between House Republicans and President Obama proved fruitless. They originally stepped back to let the House negotiate after closing an earlier deal Monday, but when Republican leaders failed to arrive at a deal that would unite their own party in the House, the two Senate leaders became the last hope before the default deadline.
Senator McConnell assured Republicans of his continuing commitment to their issues, claiming victory by preserving the sequester cuts the GOP had fought for. “Republicans remain determined to repeal (Obamacare),” he said. “But for today the relief we hope for is to reopen the government, avoid default and protect the historic cuts we achieve under the Budget Control Act.”
“Now it’s time for Republicans to unite behind other crucial goals,” he later added.
Senator Reid struck a note of bipartisanship, saying of the deal, “This is not a time for pointing fingers and blame. This is a time of reconciliation.”
Having passed the Senate, the deal announced to end the shutdown and avoid a debt default must now pass the House of Representatives, but leaders indicate this is likely. Speaker of the House John Boehner said he would allow a vote, and expected it to pass. He also sounded a note of resignation regarding the GOP’s use of the shutdown tactic.“We fought the good fight,” the Speaker said in a radio interview. “We just didn’t win.”
Republicans in the House of Representatives began the shutdown with the original goal of defunding the Affordable Care Act, more commonly known as Obamacare. The shutdown had dragged on 16 days by the time the deal was announced on Wednesday, threatening the U.S.’s anemic economic recovery and leaving hundreds of thousands of government workers unpaid.
President Obama had refused to negotiate while the government shut down, repeatedly using the metaphor of not negotiating with a “gun to his head.” When the deal was announced, there were no indications that Republicans had gained any ground on their original goal of stopping the new health care law, though there was the possibility of more strict scrutiny on who receives federal insurance subsidies.
This deal barely avoids a deadline on raising the government’s borrowing limit, which the Department of the Treasury had warned would cause the U.S. to stop payments on certain debts, including its own bonds. Most economists agreed that such an outcome would be a disaster for the world economy as well as the United States.
In fact, the news of avoiding the debt default on turning the government was so well-received that even Senator Ted Cruz (R-Texas), who led the charge on shutting down the government to defund Obamacare, said he had “no objections” to there being a vote on the Senate deal, and would not block it.
Stocks have also been rallying in the New York Stock Exchange. The announced Senate deal to end the shutdown and avoid a debt default was apparently as welcome on Wall Street as it was on Main Street.
Written By: Jeremy Forbing