WASHINGTON, (Reuters) – The U.S. House of Representatives late yesterday passed legislation to avoid a damaging default on government debt and to reopen federal agencies shuttered when funding ran out on Oct. 1.
The House vote came hours after the Senate overwhelmingly approved the bill. President Barack Obama earlier yesterday said he will promptly sign the bill into law.
The deal, however, offers only a temporary fix and does not resolve the fundamental issues of spending and deficits that divide Republicans and Democrats. It funds the government until Jan. 15 and raises the debt ceiling until Feb. 7, so Americans face the possibility of another government shutdown early next year.
With the deadlock broken just a day before the U.S. Treasury said it would exhaust its ability to borrow new funds, U.S. stocks surged, nearing an all-time high.
Taking the podium in the White House briefing room after the Senate vote, Obama said that with final congressional passage, “We can begin to lift this cloud of uncertainty and unease from our businesses and from the American people.”
“Hopefully next time it won’t be in the 11th hour,” Obama said. “We’ve got to get out of the habit of governing by crisis.”
The stand-off between Republicans and the White House over funding the government forced the temporary lay-off of hundreds of thousands of federal workers from Oct. 1 and created concern that crisis-driven politics was the “new normal” in Washington.
Senator John McCain, whose fellow Republicans triggered the crisis with demands that President Barack Obama’s signature “Obamacare” healthcare law be defunded, said on Wednesday the deal marked the “end of an agonizing odyssey” for Americans.
“It is one of the most shameful chapters I have seen in the years I’ve spent in the Senate,” said McCain, who had repeatedly warned Republicans not to link their demands for Obamacare changes to the debt limit or government spending bill.
The Senate passed the measure on a 81-18 vote, and the House was expected to approve it as well, clearing the way for Obama to sign it into law no later than Thursday, when the Treasury says it will hit the $16.7 trillion debt ceiling.
Fully reopening the government was expected to take several days. While essential functions like defense and air traffic control have continued, national parks and agencies like the Environmental Protection Agency have been largely closed.
Although the deal would only extend U.S. borrowing authority until Feb. 7, the Treasury Department would have tools to temporarily extend its borrowing capacity beyond that date if Congress failed to act early next year.
The agreement includes some income verification procedures for those seeking subsidies under the healthcare law, but Republicans surrendered on their attempts to include other changes, including the elimination of a medical device tax.
The planned votes signal a temporary ceasefire between Republicans and the White House in the latest struggle over spending and deficits that has at times paralyzed both decision-making and basic functions of government.
The political dysfunction has worried U.S. allies and creditors such as China, the biggest foreign holder of U.S. debt, and raised questions about the impact on America’s prestige. The Treasury has said it risks hurting the country’s reputation as a safe haven and stable financial center.