Senate passes accord to end shutdown with House poised next

October 16, 2013 05:03 PM
House began debate at 9:24 p.m.

The Senate voted 81-18 to halt the 16-day government shutdown and raise the U.S. debt limit, moving one step closer to ending the nation’s fiscal impasse.

The House of Representatives began debate at 9:24 p.m. and plans to vote later tonight. The Senate acted the day before U.S. borrowing authority was scheduled to lapse as Congress engaged in its fourth round of fiscal brinkmanship in less than three years.

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

The agreement would put federal workers back on the job, prevent a potential default on U.S. debt and make no major policy changes sought by Republicans. Lawmakers didn’t resolve any of their long-term divides on fiscal policy and will have to return to the same issues over the next four months.

The deal 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 financing the government without attaching policy conditions. They achieved almost none of those goals in the agreement.

‘Didn’t Win’

“We fought the good fight,” House Speaker John Boehner, a Republican, said today on Cincinnati’s WLW, a radio station in his home state of Ohio. “We just didn’t win.”

The framework negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell would fund the government at Republican-backed spending levels through Jan. 15, 2014, and suspend the debt limit through Feb. 7, setting up another round of confrontations then.

All of the votes against the proposal in the Senate were from Republicans. One senator, Republican James Inhofe of Oklahoma, was absent.

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 yesterday.

Stocks Rallied

U.S. stocks rallied, sending the Standard & Poor’s 500 Index toward a record. The benchmark index rose 1.4 percent to 1,721.47 at 4 p.m. in New York after sliding 0.7 percent yesterday. S&P 500 Index futures added 0.1 percent after the gauge closed within 0.3 percent of a record in New York.

The MSCI Asia Pacific Index climbed 0.7 percent, heading for the highest close in five months. The Bloomberg U.S. Dollar Index, which tracks the greenback against 10 major peers, was little changed. The yield on 10-year Treasuries dropped one basis point to 2.66 percent following yesterday’s six basis- point decline.

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.

The shutdown took at least $24 billion out of the U.S. economy, S&P said in a report today.

“Millions suffered,” said Senator Charles Schumer, a New York Democrat. “Millions didn’t get paychecks. The economy was dragged down and confidence and faith in United States credit and in the United States around the world was shaken.”

Business Groups

The U.S. Chamber of Commerce, the country’s largest business group, supports the agreement, as does the Business Roundtable, an association of large-company chief executives. Several small-government groups, including the Club for Growth and Heritage Action for America, are urging lawmakers to vote against the accord.

House Republicans met for about 30 minutes today, and Boehner didn’t speak to reporters as he left the session. The speaker received a standing ovation at the meeting, said Representative Lynn Westmoreland, a Georgia Republican.

“Everybody appreciates what the speaker has done up till now and the whole leadership stuck together,” Westmoreland said.

Under the Senate agreement, House Republicans achieved almost none of their priorities.

“This is pain inflicted on our nation for no good reason,” Reid said after the vote. “We cannot make the same mistake again.”

Health Law

Republicans persisted after the partial government shutdown started Oct. 1 and their approval ratings dropped in polls. Hardliners resisted plans that didn’t make major changes to the Patient Protection and Affordable Care Act.

Obama 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. “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 on the Senate floor before the vote tonight that the deal “embodies everything that frustrates the American people about Washington.”

Representative Dave Camp, chairman of the House Ways and Means Committee, said Republicans will turn to oversight of the implementation of the health care law.

Republican Opposition

Some House Republicans said they wouldn’t vote for the Senate agreement.

“You will definitely see a split vote tonight,” said Thomas Massie, a Kentucky Republican. “I have one vote: I am going to vote no.”

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 three to four weeks beyond Feb. 7, said a Senate Democratic aide who spoke on condition of anonymity to discuss the plan.

“It would appear as though we’re kicking the can down the road one more time,” Representative Jim Bridenstine, an Oklahoma Republican, said in an interview. “It’s a problem. Neither side is negotiating so we kicked the can and now we’re going to have to deal with it.”

The Senate and House will also begun budget negotiations with a Dec. 13 deadline.

Dam Project

The bill authorizes more than $1 billion for a dam project on the Illinois-Kentucky border. Don Stewart, a spokesman for McConnell, said in an e-mail that appropriators, not the minority leader from Kentucky, requested the project.

Reid said the provision would save the government money.

The measure includes as much as $450 million for repairs to wildfire damage in Colorado. It also would freeze the pay of members of Congress.

A Republican-backed provision in the agreement requires the Health and Human Services Secretary, Kathleen Sebelius, to certify that the government is able to verify the incomes of people who apply for government subsidies to help pay their insurance premiums under the Affordable Care Act.

Sebelius would have to submit a report by Jan. 1, 2014, on the income verification process. The inspector general for Sebelius’s department would have to issue a report on the effectiveness of the process by July 1, 2014.

“I think it would be a great American tragedy if we had the same thing happen in three or four months,” said Senator Dianne Feinstein, a California Democrat. “I don’t think a lot of people understand what’s happened to the average person in all of this.”

The bill is HR 2775.

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