Republicans and Democrats in Congress have reached a deal to raise the U.S. debt ceiling, avoid a looming government debt default, and bring to an end the 16-day government shutdown – for a few months, anyway.
A group of 14 senators hashed out the agreement which was expected to be voted on later today, ahead of tomorrow’s looming deadline when the U.S. Treasury said it would run out of borrowing authority.
While it averted a potential financial crisis, the temporary solution merely postpones more conflict. The agreement extends the debt ceiling until Feb. 7 and funds the government until Jan. 15. (Furloughed federal workers will receive backpay.) It also allows lower levels of government funding, known as “sequestration” to take hold in the New Year. A committee of Republicans and Democrats will work on negotiating a budget agreement into mid-December. (Congress hasn’t passed a proper budget since 2009.) Underlying disputes about spending cuts and tax increases is put off for another day.
Republicans emerged from the turmoil internally divided and externally damaged, with little to show for their efforts. They had shut down the federal government in an effort to gut the president’s health care law. Obama refused to give in to their demands over a law that he considered settled by a Supreme Court ruling and an election that returned him to office. In the end, Democrats agreed to one modification to the law: applicant for government subsidies for buying health insurance will have to prove that their incomes are low enough to qualify. Asked whether the income verification provision amounted to a “ransom,” White House spokesman Jay Carney said no, “We’re fine with it.”
The agreement must now be passed by both the House and Senate. Ted Cruz, the freshman Florida senator who led the push for the shutdown, said today he would not seek to derail the agreement in the Senate.
In the House, Republicans are divided between moderates who wanted to end the shutdown and the conservative hard-liners who insisted on standing on their principles. Speaker John Boehner had made a final push to come up with a Republican proposal yesterday, but could not come up with a plan that could get his caucus to unite.
Conservative groups, such as the Club for Growth, FreedomWorks, and Tea Party Patriots, are now calling the Senate agreement a “surrender” and urging Republicans in the House to vote against the compromise. That would mean it would have to be passed by mostly Democratic votes with some moderate Republicans. Boehner has traditionally refused to bring anything to a vote that did not have the support of a majority of House Republicans.
Speaker Boehner has been at the center of much of the drama. Until recently, the conservative faction in the House had considered Boehner, well known as a backroom negotiator, to be too willing to compromise with Democrats, including Obama, — with whom he had tried to hash out an ill-fated “grand bargain” on government spending and taxes in 2011 — and his hold on the speakership was considered fragile. Boehner’s unwillingness to stand up to his own conservative backbenchers and prevent or shorten the shutdown led Nancy Pelosi to call him weak, but today he drew praise from the hard-liners who said his job is now safe.
Republican lawmakers who are not part of the Tea Party faction lamented that their party’s approval ratings have been severely damaged during the shutdown – and that it distracted attention from problems with the rollout of the new health care system which has been plagued by technical problems. Said Senator Lindsay Graham of South Carolina: “Our numbers have gone down. Obamacare’s somehow have mysteriously gone up. And other than that, this has been great.”