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US avoids default as Congress passes deal to end shutdown

 
 
 
 
 
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US President Barack Obama has signed legislation passed by Congress Wednesday to temporarily lift the debt ceiling and end the government shutdown, averting the threat of default just hours before the October 17 deadline.

The legislation funds the government through to January 15 and lifts the $16.7 trillion debt ceiling until February 7. The White House budget director, Sylvia Mathews Burwell, said she has issued a directive to all government employees to return to work.

The 16-day budget crisis has subtracted an estimated $24 billion in from the American economy and triggered a flurry of criticism from major foreign lenders and domestic business captains.

As promised, Obama signed the legislation shortly after it was passed in the House of Representatives.

As indicated before the US Senate vote, Republican House Speaker John Boehner did not block the fiscal deal from moving on, and it passed by a vote of 285-144 in the lower chamber.

The measure was supported by every Democratic member of the House, but was rejected by a sizeable portion of Boehner’s GOP caucus.

Conservative Republicans were nearly unanimous in their opposition to the plan, as the federal health care law – the Affordable Care Act, or Obamacare – they so object to will go virtually unscathed after all.

The Senate approved the proposal by a vote of 81-18 earlier on Wednesday evening.

Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell spent previous days constructing a deal as the House failed to come to an agreement on a proposal Tuesday.

“This compromise we reached will provide our economy with the stability it desperately needs. It’s never easy for two sides to reach consensus. It’s really hard, sometimes harder than others. This time was really hard,” Reid said ahead of the vote. “The country came to the brink of a disaster. But in the end, political adversaries set aside their differences and disagreement to prevent that disaster.”

Republicans Senators Ted Cruz, Rand Paul and Marco Rubio were among the 18 ‘nay’ votes in the Senate.

“This is a terrible deal,” said Senator Ted Cruz on the Senate floor before the vote. “This deal embodies everything about the Washington establishment that frustrates the American people.”

President Obama said in a statement after the Senate vote that Washington must begin to gain back the trust of voters given that more confrontations on debt, governmental budgeting, and other issues await.

“Hopefully next time, it won’t be in the eleventh hour. We’ve got to get out of the habit of governing by crisis,” Obama said.

The US Treasury’s authority to borrow money to pay down US debt obligations was scheduled to end Thursday, October 17. With no full spending bill from Congress, many government operations have been on hold since October 1.

The 16-day government shutdown has cost the US $1.7 billion per week in lost economic output, according to a study by IHS Global Insight, a Massachusetts-based research firm. The S&P ratings agency declared Wednesday the shutdown has subtracted $24 billion from the US economy, cutting 0.6 percent from the fourth quarter GDP growth.

Major US creditors like China – which holds $1.3 trillion in US Treasuries – have openly discussed “de-Americanizing” as the crises-hopping US government has become increasingly volatile to the world economy. China has introduced a so-called “haircut,” or a discount, on the value of US Treasuries held as collateral against futures trades.

Developing and developed nations are equally concerned, and institutions like the World Bank and the International Monetary Fund (IMF) have issued several warnings.

Some US business leaders are too voicing their discontent with Washington’s political turmoil.

“Most CEOs I speak to in the United States say they’re seeing a slowdown in business because of this,” Laurence Fink, the CEO of giant asset manager BlackRock Inc, told Reuters in an interview on Wednesday.

“I was on a conference call with many of them, and I heard across the board, a slowdown from the American consumer because of this narrative, so it’s having an impact on our economy already – and it’s going to have an impact on job creation at a time when we need more job creation,” he added.

Upon news of a deal, the Dow Jones Industrial Average shot up by more than 200 points.

“Investors are relieved that it looks like we’re not going to go over the cliff,” Ben Hart, a research analyst at the Pennsylvania-based Haverford Trust Co., told Bloomberg News. “It takes the worst case scenario off the table.”

The Senate deal will provide back pay to furloughed government workers and will allow the US Treasury to pay US debt bills should Congress not come to an agreement on the ceiling by February 7.

In addition, the deal comes with an income verification requirement for anyone receiving health insurance subsidies under the Affordable Care Act.

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  • Zharkov

    Raising the debt limit destroyed the myth that the three branches of government are “checks and balances” against each other, just as ObamaCare destroys the myth that America is a free country.

    Constitutionally, the current Obama regime should not even exist. It does not comply with the founding document at all. All revenue legislation must originate in the House of Representatives, but the ObamaCare tax and Debt Limit increase both originated in the Senate. Obama and Congress have created a form of government not authorized by the US Constitution.

  • Wayne Marion

    You all voted him in. He commenced tearing up the constitution where Bush left off. Then you voted him in again. And still you have people walking around singing Obama praises. Your country is broke. No wonder Ron Paul retired. Sorry bud but the general American public has their head in the sand and refuses to pull it out. Yours was once a great nation. One I loved also but now, you are heading for the abyss.

  • Mary

    The lazy couch potatoes voted him in. That is what is wrong with this country. In addition to that, there is a very corrupt Congress that is also very split as well. So those are the two major issues.

    I am personally embarrassed by the actions of this country. If no country wishes to engage with us due to our complete lack of responsibility and other matters, I very honestly say that I can’t blame them. The recklessness that more than likely came from pure arrogance has definitely took a turn for the worse. I will say that there are many Americans (ordinary Americans) that have tried desperately to get rid of these people in the best interest of America, and that concerns both domestic and foreign relations. But this is an embarrassment to America and this should not come as a surprise to other nations. This situation would have resolved as soon as it happened on October 1 since 13% of the budget is the ACA that does cut into making international payments and deadlines and that is not to mention that Americans don’t even want it to begin with, unless they are a couch potato or hard-core Democrat. Obama was being a non-negotiable narcissist and that’s what took so long. The rest of us did have to cave in order to make this payment (extremely embarrassing once again), but we have made statements that this is definitely not over and we have to figure out how to stop being reckless. Our unyielding and narcissist President will not stop, there are too many lazy people that want a free ride, and the remainder of us are “blown away” and can’t think of any viable solutions to this problem. To other countries watching or reading this, I would deal with someone other than President Obama and Congress that wants to behave in these manners and take care of your own countries. Should this behavior continue, the United States is done. I would honestly begin to look for alternate measures. No one needs this … including honest, working Americans.

  • Pam

    Our problems effectively began in Christmas time of 1913, during which time our then president Wilson signed into law the Federal Reserve Act which caused the Treasury to forfeit its power to print money and created our Federal Reserve Note (i.e., what’s printed on every dollar printed in the USA). Until that time there was NO debt. The Federal Reserve Bank, currently chaired by Ben Bernanke, is a group of elitist international bankers — Not even American bankers! “the Federal Reserve Note is an interest bearing currency which requires us to give the banks 500 billion dollars a year in interest payments for debts which are fictions created by a law passed in 1913. The Federal Reserve was designed to transfer our wealth to the bankers.” Quoted from http://vidrebel.wordpress.com/2012/04/01/the-federal-reserve-from-creation-in-1913-to-destruction-in-2013/ Feel free to look at other references and you’ll see that, beyond links created by the government and the Fed, most of them agree with this premise. Our national debt, explained. There ya go.

  • Thus says The Lord: O nation, once called of itself “under God”, you have raised yourselves above Me… You shall be brought VERY low! And because you have said within yourselves, even aloud, saying, “We are not under God, nor do we serve any god. Right is wrong, and wrong is right and the right of the individual.” Therefore, because you have spoken in such a manner, you shall surely come to know God!

    You shall come to know Me in My anger!…

    I shall show you what is right,
    And I, even I, shall cause you to discern!…

    And you shall choose! Says The Lord.

    Behold! The Sword has come! And under God shall you be placed, once again! Yet not as at the first when you blessed My name, no, not as at the first… But in subjection, in recompense, under God in punishment, in retribution, in correction, in discipline, under the shadow of My judgment!… Under God, My footstool!… Then shall you know and remember, I AM THE LORD!

    O mighty nation, cease from your adulteries and return to Me…

    For I had blessed you;
    I had bestowed upon you great abundance…

    Yet now you have gone out to pervert your way
    And desecrate all I have given you…

    Hardening your hearts, forsaking the poor,
    Turning your faces away from the afflicted.

    You have become a harlot, an adulterous woman,
    Perverting her way among many lovers…

    Return! Says The Lord…

    Return to Me.

    excerpt from:
    http://trumpetcallofgodonline.com/index.php5?title=Thus_Says_The_Lord_to_the_United_States%2C_and_to_All_the_Churches_of_Men_Which_Dwell_Within_Its_Borders:_Return_to_Me!_Stand_Up_or_Bow_Down!…_Call_Out%2C_Cry_and_Wail!

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