Senate leaders announce bipartisan deal

Just a day before the federal government reaches its borrowing limit, Senate leaders announced Wednesday that they have struck a deal to re-open the government and avert a potentially cataclysmic default on U.S. debt payments.

The final package, unveiled by Democratic Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell on the Senate floor, would fund the government through Jan. 15 and raise the debt ceiling thorough Feb. 7.

The bill also would strengthen income verification requirements for those who sign up for insurance under Obamacare, and it would provide time for both parties to appoint lawmakers to a conference committee to reconcile a broad budget resolution. The panel would be led by Budget Committee heads Republican Rep. Paul Ryan of Wisconsin and Democratic Sen. Patty Murray of Washington, and it would be required to announce the result of its negotiations by Dec. 13.

“This has been a long challenging few weeks for Congress and for the country," McConnell said. “It’s my hope that today we can put some of the most urgent issues behind us."

There was concern earlier Wednesday that Sen. Ted Cruz, the Texas Republican who staged a 21-hour speech on the Senate floor to protest the federal health care law, would use a procedural tactic to block a vote on the deal. But after the announcement, Cruz told reporters that he would not move to deter the bill's progress through the chamber.

"I have no objections to the timing and the reason is simple. There's nothing to be gained from delaying this vote one day or two days," Cruz said. "The outcome will be the same. Every senator, every member of the House is gonna have to make a decision where he or she stands, but there's no benefit. I've never had any intention of delaying the timing of this vote."

The deal drew a quick, warm welcome from President Barack Obama, who "applauds" Reid and McConnell "for working together to forge this compromise" and hopes Congress will pass it "as soon as possible," spokesman Jay Carney said. 

“He looks forward to Congress acting so that he can sign legislation that will reopen the government and will remove this threat from our economy," Carney told reporters at his daily briefing.

The announcement of a deal was good news for stocks: The S&P 500 index jumped more than 20 points and other market indicators showed signs of continued confidence in the federal government's ability to pay its bills on time.

With the guidelines of the deal set, congressional officials are still puzzling over the next procedural steps. While the deal was being crafted almost entirely by Senate staff, aides underlined that it is still very possible that the House would end up casting the first votes of the day.

It the House did act first, it was not clear whether it would vote on the Reid-McConnell deal or on legislation that would serve as a “vessel” for a final compromise, helping to strip away potential parliamentary procedural roadblocks.

But any House vote is expected to rely heavily on the lion’s share of Democrats’ 200 votes to secure passage. Depending on the legislation, that could leave the Senate to strike the final blow to a crisis that already has rattled bond markets and left observers around the world shaking their heads at Washington’s enthusiastic dysfunction.

Washington is watching Republican House Speaker John Boehner to see how he will tackle a process that has left many tea party-affiliated GOP lawmakers unhappy. Those lawmakers precipitated the crisis by initially insisting that any vote to raise the debt ceiling be coupled to measures rolling back Obamacare. Those demands faded in the face of ironclad opposition from Senate Democrats (displaying surprising unity) and President Obama.

The Treasury Department says the U.S. government is close to running out of borrowing authority, which it says will take place at midnight Thursday into Friday.

Because the cash-strapped U.S. government needs to borrow cash to pay for existing programs, failure to raise the debt limit means that not long after Thursday the government will not be able to pay all of its bills.

That raises the prospect of a default on America’s public debt as well as on other obligations such as Social Security payments, which would send a shock wave through the fragile global economy. Independent economists have warned that the international financial system’s reliance on the American economy (and U.S. Treasury bills) mean that the global economy could face a fresh contraction, possibly a severe recession.

Source: http://news.yahoo.com/compromise-or-collapse--lawmakers-eye-breakthrough-on-debt--spending-150123572.html
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