Debt Ceiling Crisis Averted: An Inside Look
Update October 16, 9:30 pm - Congress has approved the deal to raise the debt limit and reopen the government. The deal passed the Senate 81-18 and the House of Representatives 285 - 144. House Democrats voted unanimously in favor of the bill, with significant opposition from Republicans. President Obama has indicated that he will sign the bill tonight.
The government is expected to reopen Thursday morning.
NEW YORK (MainStreet) It's about to be over. On Wednesday afternoon the Senate reached a deal to reopen the government and lift the debt ceiling fewer than 24 hours before breaching it. The White House has signaled its support for the Senate brokered deal and Speaker John Boehner (R-Ohio) has indicated that he will allow the bill to come for a vote in the House.
Analysts expect that the bill will pass the House with near-unanimous Democratic support. Although many conservatives oppose the plan, it's expected that enough Republican legislators will join with Democrats to form a majority. This will mark the first time during the present crisis that Boehner has allowed a vote related to government funding or the debt ceiling without majority approval from the Republican caucus.
The agreement is the result of negotiations between Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY). The major terms are:
- The debt ceiling will be extended to February 7, 2014.
- The government will receive a continuing resolution to stay funded until January 15.
- A House/Senate conference committee will be created to discuss the budget. It will report back on December 13 regarding a long-term budget blueprint.
- Income verification standards for subsidies under the Affordable Care Act will be tightened.
January 15 is, in particular, a significant date, as it's when the next round of sequester budget cuts kick in. The continuing resolution will fund the government at September 30 levels until then, after which Congress will need to pass either a new budget or another continuing resolution.
This news comes on the heels of a warning from Fitch, a credit rating agency, that the United States could face another downgrade of its credit in the near future.
Under this bill, the government could reopen as early as Thursday after 16 days shut down.
--Written for MainStreet by Eric Reed, a freelance journalist who writes frequently on the subjects of career and travel. You can read more of his work at his website www.wanderinglawyer.com.