Congress is poised to end the 16-day government shutdown and raise the U.S. debt limit after the bipartisan leaders of the U.S. Senate reached an agreement to end the nation’s fiscal impasse.
The Senate and House plan to vote on the deal later today, and the White House press secretary said President Barack Obama supports the deal.
“We fought the good fight,” House Speaker John Boehner, a Republican, said today on WLW, a radio station in his home state of Ohio. “We just didn’t win.”
Boehner said in a statement that Republicans won’t block the Senate compromise.
The agreement concludes a four-week fiscal standoff that began with Republicans demanding defunding of Obama’s 2010 health-care law and objecting to raising the debt limit and funding the government without attaching policy conditions. They achieved almost none of those goals in this agreement.
“This is far less than many of us had hoped for, frankly, but it’s far better than what some had sought,” said Mitch McConnell, the Senate minority leader, who said the measure retains Republican-preferred spending levels.
The framework negotiated by Majority Leader Harry Reid and McConnell would fund the government at those Republican-backed levels through Jan. 15, 2014, and suspend the debt limit until Feb. 7, setting up another round of confrontations then.
“This agreement achieves what is necessary,” said Jay Carney, the White House press secretary.
The Senate accord was unveiled a day after Fitch Ratings put the U.S. AAA credit grade on ratings watch negative, citing the government’s inability to raise the debt ceiling in a timely manner, according to a statement after markets in New York closed.
U.S. stocks rallied, sending the Standard & Poor’s 500 Index toward a record. The benchmark index rose 1.1 percent to 1,717.58 at 2:41 p.m. in New York after sliding 0.7 percent yesterday.
Rates on Treasury bills maturing in the next six weeks fell amid optimism lawmakers worked to resolve the fiscal impasse. Rates on $120 billion of bills maturing tomorrow dropped to 0.03 percent after rising as high as 0.36 percent yesterday.
One-month rates fell 21 basis points, or 0.21 percentage point, to 0.14 percent at 2:46 p.m. in New York after touching 0.45 percent, the highest since October 2008, according to data compiled by Bloomberg. The benchmark 10-year yield fell five basis points to 2.68 percent, according to Bloomberg Bond Trader data.
“The compromise we reached will provide our economy with the stability it desperately needs,” Reid said.
The partial shutdown has closed national parks, slowed clinical drug trials and led to the furlough of thousands of federal workers. The Senate proposal would provide back pay for furloughed workers, said a Democratic aide speaking on condition of anonymity to discuss the plan.
The U.S. Chamber of Commerce, the country’s largest business group, supports the agreement. Several small-government groups, including the Club for Growth, are urging lawmakers to vote against the accord.
The Senate probably will vote before the House, said a House aide speaking on condition of anonymity because the plans aren’t set.
House Republicans met for about 30 minutes and members, including Boehner, didn’t speak to reporters as they left the session.
Under the Senate agreement, House Republicans would get almost none of their priorities.
“If there is a silver lining in this cloud, it’s that hopefully this debacle means that the power of those that favor confrontation has peaked,” Senator Charles Schumer, a New York Democrat, said in a statement.
Republicans persisted after the partial government shutdown started Oct. 1 and saw their approval ratings drop in polls. Hardliners resisted plans that didn’t make major changes to the Patient Protection and Affordable Care Act.
Obama has described those requests for health-law changes as unacceptable ransom demands and insisted that Republicans relent.
Senator Kelly Ayotte, a New Hampshire Republican, questioned some other Republicans’ approach to the health law.
“If they’re saying the defunding issue is going to come up again in three months, then they’ve learned nothing from this,” she said. “If we learned nothing else from this exercise, I hope we learned that we shouldn’t get behind a strategy that cannot succeed.”
Senator Ted Cruz, a Texas Republican who spoke against the health law for 21 hours last month, said he will continue to fight to make “Washington respond to the very real harms that Obamacare is causing.” He said he wouldn’t delay a Senate vote.
Some House Republicans said they wouldn’t vote for the Senate agreement.
“The Senate plan is not what I support,” Representative Jim Jordan of Ohio told reporters today. “My preference is that we address the underlying problem, which is we have a $17 trillion debt and we deal with the deficit problem and we treat people fairly under Obamacare.”
The Senate agreement trades the pressing and already-missed deadlines for new ones over the next four months. The Treasury Department would be allowed to use so-called extraordinary measures to delay default for about another month beyond Feb. 7, said a Senate Democratic aide who spoke on condition of anonymity to discuss the plan.
The accord includes a Republican-backed provision to tighten income-verification requirements for people receiving health-insurance subsidies, said two Senate Democratic aides who spoke on condition of anonymity to discuss the plan. The agreement won’t include a health-law provision backed by Democrats and labor unions that would delay a reinsurance fee on group health plans, the aides said.
Carney said the income-verification provision wasn’t a ransom.
Unless Congress acts, U.S. borrowing authority will lapse at the end of tomorrow, leaving the Treasury Department with only $30 billion in cash and incoming revenues to make promised payments. Without action, the U.S. will begin missing payments between Oct. 22 and Oct. 31, according to the Congressional Budget Office.
Boehner tried several times over the past month to construct a debt-limit bill that House Republicans could support, and he hasn’t brought any proposals to a vote. Republicans didn’t have enough support for the measure yesterday, said a leadership aide who spoke on condition of anonymity to discuss vote counting.
Unlike previous stopgap spending measures, the final House bill wouldn’t have made big changes to the 2010 health-care law, and it contains no cuts to entitlement programs that Republicans sought to add to a debt-limit increase or spending bill.