After the partisan passions and heated rhetoric, the disruptions of a government shutdown and displays of dysfunction, Congress did what it could have done weeks ago: voted to fund the government and lift the debt limit.
The passage last night by wide margins -- an 81-18 vote in the Democratic-led Senate, followed by a 285-144 vote in the Republican-controlled House -- allows the U.S. to avoid default and ends the shutdown that began Oct. 1 and has taken $24 billion out of the U.S. economy.
President Obama signed the bill just after midnight, according to a White House statement. The measure puts government workers back on the job starting today and permits the U.S. to pay its debts, benefits and salaries.
“We’ll begin reopening our government immediately and we can begin to lift this cloud of uncertainty and unease from our businesses and from the American people,” Obama said last night at the White House after the Senate voted.
Lawmakers didn’t show they’re any closer to resolving the underlying issues of spending priorities and deficit-reduction measures, particularly in the House where a shrinking political middle makes compromise elusive as the latest events show.
The focus now shifts to a new series of deadlines -- the first for budget negotiations with a Dec. 13 target -- that set up more rounds of political combat over taxes and spending on programs including Social Security and Medicare. The deal funds the government at Republican-backed spending levels through Jan. 15, 2014, and suspends the debt limit through Feb. 7.
Tea Party-allied Republicans, such as Texas Senator Ted Cruz, said they would find ways to keep up the fight against Obama’s health-care law.
“The Republican Party has learned a lesson here, and I think you’re going to see a more mainstream Republican Party,” Senator Charles Schumer, a New York Democrat, said today on MSNBC’s “Morning Joe” program. “I don’t think we’ll have the same kind of brinkmanship on Jan. 15 and Feb. 7.”
The votes conclude a four-week fiscal standoff that began with Republicans demanding defunding the Patient Protection and Affordable Care Act, and objecting to raising the debt limit and funding the government without policy conditions.
They achieved almost none of those goals. Obama and the uncharacteristically unified congressional Democrats stared down Republicans, particularly those allied with the Tea Party movement, who had sought to use the shutdown and debt ceiling as leverage even as more experienced lawmakers realized they didn’t have the votes.
Judd Gregg, a former New Hampshire Republican senator and veteran of Obama’s first-term fiscal commission, said members of his party took on the wrong fight when they made it about Obama’s health-care law. Gregg is now chief executive officer of the Securities Industry and Financial Markets Association.
“It was an exercise in dysfunctional government,” Gregg said in an interview. “It was a loser position from the beginning because there was no way in divided government you’re ever going to repeal Obamacare. We should have been debating as Republicans how we fix our fiscal house.”
The practice of governing by crisis has become so established in Washington that financial markets weren’t disturbed by the impasse, correctly anticipating a deal would come at the last moment as happened in a similar standoff two years ago.
U.S. stocks rallied yesterday on news of the agreement, sending the Standard & Poor’s 500 Index toward a record. The benchmark index rose 1.4 percent to 1,721.54 in New York after sliding 0.7 percent when the deal looked uncertain the previous day. The Dow Jones Industrial Average rose 205.82 points, or 1.4 percent, to 15,373.83.
The Stoxx Europe 600 Index fell 0.2 percent to 314.86 at 1:16 p.m. in London. Standard & Poor’s 500 Index futures slipped 0.1 percent, while the MSCI Asia Pacific Index added 1 percent.
In China, Dagong Global Credit Rating Co. downgraded its local and foreign-currency assessments of the U.S. to A- from A. Dagong is based in Beijing and one of the nation’s four biggest credit-rating companies. China has the largest foreign holdings of U.S. Treasuries, and the latest monthly U.S. government figures showed it increased its total in July.
Federal agencies were instructed to begin opening offices today in a “prompt and orderly manner” and furloughed employees were told to return to work, according to a memo from White House budget office Director Sylvia Burwell.
“We will work closely with departments and agencies to make the transition back to full operating status as smooth as possible,” Burwell said in the memo released early today.
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