Racing against the midnight deadline, Senate leaders on Wednesday finalised a bipartisan deal to raise the US debt ceiling and end the partial government shutdown, but still faced the formidable challenge of getting the measure through both chambers and in time.
The deal, announced on the Senate floor around noon, seeks to reopen the federal government and fund it till January 15, raise the national debt limit till February 7 and set up a negotiating committee to complete by December 13 a long-term budget plan for the next decade.
Given that the deal essentially kicks the can down the road, reopening the issues of government funding and debt ceiling in just three to four months’ time, the Obama administration, the divided Congress and America at large will all be grappling with these critical issues all over again and all too soon.
Even so, the White House was quick to welcome the deal. “The President applauds leader (Harry) Reid and Minority leader (Mitch) McConnell for working together a compromise an encourage Congress to act swiftly to end the shutdown and protect the full faith and credit of the United States,” spokesman Jay Carney said.
The immediate task on Capitol Hill was to see to it that the deal is approved by both the Republican-controlled House of Representatives and the Democrat-led Senate and rush it to the White House for the President’s signature before the midnight hour.
There was no immediate word from Speaker John Boehner on the House plan of action on the Senate deal, which followed after a couple of House versions failed to advance. In a hopeful sign on the Senate side, Republican Senator Ted Cruz, who had staged a 21-hour filibuster to push the Tea Party agenda particularly over defunding or delaying “Obamacare”, announced that he would not resort to any procedural delays. He, however, would vote against the deal.
In the House, the Tea Party votaries are a sizeable chunk of about 40 members. But they would not count since the deal, being a bipartisan effort with White House approval, would command overwhelming Democratic support, if only it was brought as it is -- without any amendments.
On the contentious issue of Obamacare, the only concession the deal offers is inclusion of an income verification clause for prospective beneficiaries, projected as a measure to guard against fraud.
News of the Senate deal immediately rallied Wall Street, with the Dow Jones industrial average up by 200 points, disregarding for the time being the Fitch rating agency’s overnight action in placing the United States on “rating watch negative” – an indication that it could downgrade America’s ‘AAA’ credit rating if a debt default was not averted. Opinion was divided on whether America would really go into default if it missed the midnight deadline. While the Obama administration has been insisting that the US Treasury would forfeit its borrowing authority, financial experts do not believe October 17 to be the “drop-dead” date, noting the US authorities would have grace time till end of the month.
Their assertion is based primarily on information that the US Treasury would still be left with about $30 billion to pay the nation’s bills, regarded as enough to last for a week or two. Some Republicans, however, were blunt in their assessment of the deal and critical of their own party’s approach on this matter. “This package is a joke compared to what we could have gotten if we had a more reasonable approach,” said Republican Senator lindsey Graham, adding: “For the party, this is a moment of self-evaluation, we are going to assess how we got here. If we continue down this path we are really going to hurt the Republican Party long term.”