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Senator says US budget, debt deal in hand - ASHARQ AL-AWSAT English Archive
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US Senator Kelly Ayotte, R-NH, walks to the weekly policy luncheon on Capitol Hill in Washington, DC, October 15, 2013. (AFP PHOTO / Jim WATSON)

US Senator Kelly Ayotte, R-NH, walks to the weekly policy luncheon on Capitol Hill in Washington, DC, October 15, 2013. (AFP PHOTO / Jim WATSON)

Washington, Associated Press—Senate leaders agreed to a bipartisan plan Wednesday to avert a threatened US default and reopen the federal government after a 16-day closure, according to a Republican senator. Stocks soared as the crisis that has gripped Washington for weeks appeared to be nearing its end.

Sen. Kelly Ayotte also said the House of Representatives might vote first on the plan to speed its way through Congress and put it on President Barack Obama’s desk for signing before Thursday’s default deadline.

“I understand they’ve come to an agreement but I’m going to let the leader announce that,” Ayotte said as she walked into a meeting of Senate Republicans called to review details of the emerging deal struck with Democrats who control the Senate.

US stock indexes jumped by more than 1 percent by late morning.

The crisis began on Oct. 1 with a partial shutdown of the federal government after House Republicans refused to accept a temporary funding measure unless Obama agreed to defund or delay his health care overhaul law. It escalated when House Republicans also refused to move on needed approval for raising the amount of money the Treasury can borrow to pay US bills, raising the specter of a catastrophic default. Obama vowed repeatedly not to pay a “ransom” in order to get Congress to pass normally routine legislation.

The hard-right tea party faction of House Republicans, urged on by conservative Texas Republican Ted Cruz in the Senate, had seen both deadlines as weapons that could be used to gut Obama’s health care overhaul, designed to provide tens of millions of uninsured Americans with coverage. The Democrats remained united against any Republican threat to Obama’s signature program, and Republicans in the House could not muster enough votes to pass their own plan to end the impasse.

Now the Senate plan’s passage in the Republican-controlled House could require House Speaker John Boehner put the measure to a vote as is and depend heavily on minority Democrats to support it. The move is risky and seen as imperiling the House leadership, but Boehner was apparently ready to do it and end the crisis that has badly damaged Republican approval among voters.
Boehner and the House Republican leadership met in a different part of the Capitol to plan their next move. A spokesman, Michael Steel, said afterward that no decision had been made “about how or when a potential Senate agreement could be voted on in the House.”

In the Senate, Democrat Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell had resumed talks Tuesday night and were expected to soon announce details of the plan that was seen as able to pass both houses of Congress.

But a key Republican, Sen. Lindsey Graham, said the Republicans had hurt their cause through the long and dangerous standoff.

“This package is just a joke compared to what we could have gotten if we had a more reasonable approach,” he told NBC.

Driving the urgency was not only the calendar but also fears that financial markets would plunge without a deal. Looking forward, lawmakers were also concerned voters would punish them in next year’s congressional elections. Polls show the public more inclined to blame Republicans.

Since the standoff began, House Republicans have since dropped their demands to gut the health care law known as Obamacare. But Congress still struggled futilely for more than two weeks to pass two measures that are normally routine: an emergency funding bill to keep the government running and legislation to raise the $16.7-trillion borrowing limit.

Investors have been nervous. The Fitch rating agency in New York warned Tuesday that it was reviewing the government’s AAA credit rating for a possible downgrade, though no action was near. The firm, one of the three leading US credit-ratings agencies, said that “the political brinkmanship and reduced financing flexibility could increase the risk of a US default.”

The Senate deal was expected to set a mid-December deadline for bipartisan budget negotiators to report on efforts to reach compromise on longer-term issues like spending cuts. And it likely would require the Obama administration to certify it can verify the income of people who qualify for federal subsidies for medical insurance under the 2010 health care law.

The emerging Senate pact had been put on hold Tuesday, an extraordinary day that highlighted how unruly rank-and-file House Republicans can be, even when the stakes are high. Facing solid Democratic opposition, Boehner tried in vain to write legislation that would satisfy Republican lawmakers, especially hardcore conservatives in the tea party caucus.

Boehner crafted two versions of the bill, but neither made it to a House vote because both faced certain defeat. Working against him was word during the day from the influential conservative group Heritage Action for America that his legislation was not conservative enough—a worrisome threat for many Republican lawmakers whose biggest electoral fears are of primary election challenges from the right. Primary votes determine which candidate makes it to the ballot for general elections.

Heritage Action said Boehner’s proposal “will do absolutely nothing to help Americans who are negatively impacted by Obamacare.”

The last of Boehner’s two bills had the same dates as the emerging Senate plan on the debt limit and shutdown. It also blocked federal payments for the president, members of Congress and other officials to help pay for their health care coverage. And it prevented the Obama administration from shifting funds among different accounts—as past Treasury secretaries have done—to let the government keep paying bills for weeks after the federal debt limit has been reached.

Republicans in the Senate, who must be elected on a statewide basis rather than in smaller congressional districts drawn up to secure a Republican advantage, were eager to end the partial government shutdown and avoid an even greater crisis if the government were to default.

The shutdown, the first in 17 years, has furloughed more than 400,000 federal workers.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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