The US has avoided defaulting on its loans – and the potential of
another financial crisis – thanks to a last-minute deal struck between
Democrats and some Republicans. Congress voted late Thursday night to
pass a bill that ended the government shutdown and enabled the
government to borrow more money to pay its bills.
The vote came at the end of a 16-day shutdown that was the result of
a political standoff between House Republicans and the
Democratic-controlled Senate over whether to include funding for the
Affordable Care Act, commonly known as “Obamacare”. While Republicans,
despite decreasing public support, fought to deny funding for the ACA,
the final budget bill included the full funding.
“We fought the good fight; we just didn’t win,” said House Speaker
John Boehner (R-Ohio) in an interview with conservative radio host Bill
“[The Republicans] got nothing,” Stuart Rothenberg of The Rothenberg
Political Report and Roll Call newspaper told the NewsHour. “They got
nothing. This was a disaster for them. They picked a fight that they
In addition to reopening the government, Senate leaders also agreed
to raise the debt ceiling limit, averting a potential financial crisis
by preventing a default. In a default, the US government would not be
able to pay its bills.
“Since Senate Democrats passed a budget in March, we have been ready
and willing to negotiate a smart, balanced way to further cut the
deficit and lay a foundation for economic growth,” writes Senate
majority leader Harry Reid’s (D-Nev) office in a fact sheet a
explaining the deal to the press.
“The bipartisan agreement to re-open the government and pay our
bills will put an end to the reckless, irresponsible Tea Party shutdown
and prevent a default that would have been more damaging than the 2008
Economists had warned that if the nation defaulted, “mortgages would
soar, consumers and businesses be unable to borrow, the government
forced to pay untold extra billions to borrow more money, if and when
it can, plunging us deeper into debt,” reports NewsHour economics
correspondent Paul Solman.
In a statement, Speaker Boehner vowed to keep fighting the
healthcare law, but acknowledged that Republicans were unwilling to
risk further harm to the economy to win.
“The House has fought with everything it has to convince the
president of the United States to engage in bipartisan negotiations
aimed at addressing our country’s debt and providing fairness for the
American people under ObamaCare,” he said. “That fight will continue.
But blocking the bipartisan agreement reached today by the members of
the Senate will not be a tactic for us.”
President Obama signed the bill into law after midnight on Thursday
night. The measure funds federal agencies until mid-January, at which
point there will most likely be another political battle.
Here are five highlights of the deal:
- GOVERNMENT SHUTDOWN: The shutdown was ended
immediately and federal agencies will be financed until January 15.
Workers furloughed without pay when the shutdown began October 1 will
receive back pay.
- DEBT CEILING: The government’s authority to
borrow money has been extended until February 7. Using streamlined
procedures, Congress voted on whether to block the debt-limit
extension, but that effort was certain to fail.
- HEALTH CARE LAW: The Department of Health and
Human Services must certify that it can verify the income eligibility
of people applying for government subsidies for health insurance. By
July 1, the department’s inspector general must report on the agency’s
safeguards for preventing fraud.
- LONGER-RANGE BUDGET ISSUES: In an accompanying
agreement, House-Senate bargainers will negotiate over issues such as
budget deficits and spending levels. The bargainers must issue a report
by December 13, but they are not required to come to an agreement by
- OTHER ITEMS: There will be no pay raise for
members of Congress in 2014. A total of $636 million has been allocated
to the Interior Department and the Forest Service for firefighting.
Work will continue on a lock in the Ohio River between Kentucky and
1. What does this mean for US citizens?
2. What were the effects of the shutdown in the long and short term?
3. Who was specifically involved in ending the government shutdown?
What was their role?