Senate and House pass bill to re-open the government, raise the debt ceiling

Yahoo News

At the end of the 16th day of the government shutdown, the Senate and House passed a bill that would reopen the government and avert a potentially cataclysmic default on U.S. debt payments by raising the federal government's debt limit.

The Senate voted 81-18 to pass the measure, and the House voted 285-144.

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

The bill would also 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.

President Barack Obama said Wednesday evening soon after the Senate vote that he would “immediately” sign the legislation.

“Once this agreement arrives on my desk, I will sign it immediately, we’ll begin reopening our government immediately, and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people,” Obama said in the White House briefing room.

When Obama signs the bill, it will end the nation's first government shutdown in 17 years, and give lawmakers more time to negotiate a broader package of spending reforms.

Earlier on Wednesday, there was concern 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 deal was announced, 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, who voted against the bill, said. "The outcome will be the same. Every senator, every member of the House is going to 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."

On Wall Street, the announcement and passage of a deal was welcome news: 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.

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 would have meant that not long after Thursday the government will not be able to pay all of its bills.

That would have raised the prospect of a default on America’s public debt as well as on other obligations such as Social Security payments, and 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) means that the global economy could face a fresh contraction, possibly a severe recession.

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