Senate leaders on Wednesday struck an 11th-hour agreement to avoid a U.S. debt crisis and fully reopen the federal government, putting lawmakers on track toward ending a stalemate that worried investors world-wide and provided striking evidence of congressional dysfunction.
House Speaker John Boehner (R., Ohio) has said he would bring whatever deal the Senate crafts to the floor of the House, where Republicans on Tuesday had tried and failed in their own last-minute effort to unify behind a proposal to end the impasse. The Senate deal gives GOP lawmakers almost none of the policy gains they had sought, but enough House Republicans are expected to join with Democrats in order to pass the measure.
It was unclear when each chamber would vote, but some lawmakers said the Senate agreement could clear both chambers on Wednesday.
The Senate plan, announced by leaders as the Senate opened its session, would fund federal agencies at current spending levels through Jan. 15 and extend the nation’s borrowing authority through Feb. 7. A negotiating committee would separately be charged with devising plans for longer-term fiscal solutions.
“The compromise we reached will provide our economy with the stability it desperately needs,” Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor. Senate Republican Leader Mitch McConnell (R., Ky.) also spoke, saying he was confident the deal would end the budget stalemate on Wednesday.
President Barack Obama will accept the deal, White House spokesman Jay Carney said. Mr. Obama believes the agreement “will reopen the government and remove the threat of economic brinksmanship,” Mr. Carney said. “The president hopes that both houses will act swiftly on this agreement.”
There was palpable relief among Republicans who had been part of a bipartisan effort to break the deadlock. “We’re ready to open the government and we are ready to make sure everyone around the world knows the U.S. pays its bills on time,” said Sen. Lamar Alexander (R., Tenn.).
Senate leaders from both parties raced to complete work on the deal to fully reopen the government, closed now for 16 days, and act ahead of a landmark moment on Thursday, when the U.S. Treasury says it will exhaust emergency borrowing powers and be left with only about $30 billion to pay the nation’s bills, enough to last for a week or two.
If all 100 senators agree, the bill could potentially come to a final vote in the Senate later Wednesday. Sen. Ted Cruz (R., Texas), who has led a charge against the 2010 health-care law that led to the government shutdown, said he would vote against the bill but wouldn’t prevent it from coming to a quick vote, a sign the measure could quickly move in the Senate. “There is nothing to be gained from delaying this vote one day or two days,’’ said Mr. Cruz.
The deal won’t prevent the Treasury Department from using emergency measures to avoid default in the future, a big win for the White House that will have implications the next time Congress debates whether to raise the country’s borrowing limit, congressional aides said. House Republicans pressed unsuccessfully to add restrictions in recent days.
The Senate agreement includes no major alterations to the 2010 health-care law. But the deal will include one minor change sought by Republicans, setting new procedures to verify the incomes of some people receiving government subsidies for health-insurance costs. Negotiators rejected a Democratic proposal to delay for one year a fee of $63 per insured person levied on groups that offer health policies, including employers, labor unions and insurance carriers—a fee opposed by many large employers and unions. The agreement does includes backpay for all federal workers who were furloughed during the government shutdown.
The Senate deal doesn’t include a provision granting federal agencies more flexibility to mitigate the effects of the across-the-board reductions known as the sequester. Congressional aides said the next round of cuts kick in when the stopgap spending measure ends in mid-January, motivating lawmakers to reach an agreement to ease the burden of the sequester’s blunt cuts by then. The next round of reductions will bring annual spending levels down to $967 billion from $986 billion, largely through cuts to defense spending.
The setback in the House on Tuesday was the result of pressure from conservatives, who objected both to the Senate bill and Mr. Boehner’s alternative because they gave Republicans too little of what they had been demanding. Conservatives have been pressing for major changes in the 2010 health-care law and additional measures to reduce the deficit.
GOP leaders had tried to build backing by including proposals sought by conservatives, including one that would have cut government health-insurance benefits for congressional and administration officials, including their staff, under the 2010 health-care law. But the bill met powerful headwinds when the conservative political group Heritage Action on Tuesday evening announced its opposition and said votes on the measure would be included in the group’s influential ratings of lawmakers.
Sen. Kelly Ayotte (R., N.H.), a centrist who engaged in the Senate’s bipartisan Senate talks, bridled at suggestions conservatives were prepared to re-fight the anti-Obamacare battle when the next budget deadline comes.
“They have learned nothing,” Ms. Ayotte said. “If we learn nothing else, I hope we learn we shouldn’t get behind a strategy that has no endgame.” (WallStreetJournal)
