WASHINGTON — Congress skirted disaster Wednesday night by reaching a deal to hike the nation’s debt ceiling and reopen the government, sending stock markets soaring as sanity returned to DC.
The 16-day standoff had set off worldwide financial jitters amid fears that an impasse would cause the United States to default on its debts for the first time.
With House Republicans badly divided, Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell rode to the rescue by reaching a deal that included no significant concessions from President Obama.
“He didn’t have to do anything but let it play out,” said a gleeful Rep. Eleanor Holmes Norton (D-DC).
House Speaker John Boehner quickly fell into line and declared that his chamber would pass the Senate measure — but he had to rely on Democratic votes because he couldn’t round up enough of his GOP members.
“We fought the good fight. We just didn’t win,” Boehner said.
The Senate passed the measure with a broad bipartisan vote of 81-18 Wednesday night. The House voted 285-144 to pass the bill shortly after.
President Obama signed the legislation early Thursday, and the White House issued a statement telling all government agencies to reopen and furloughed workers to return to work.
“We can begin to lift this cloud of uncertainty and unease from our businesses and from the American people,” he said in a brief news conference at the White House.
Reid got to announce the agreement on the Senate floor earlier in the day as Sen. Charles Schumer (D-NY) sat smiling in the back of the chamber.
“This is a time of reconciliation,” he said, soaking in the victory.
McConnell acknowledged, “It’s been a long, challenging few weeks for Congress and the country.” acknowledged McConnell.
Although Republicans didn’t win much in the agreement, McConnell touted the bill’s continuation of budget cuts, saying protecting government spending reductions had been a top priority.
“This is far less than many of us had hoped for, frankly,” he said, “but it’s far better than what some had sought.”
There was one bit of final drama about whether Tea Party favorite Sen. Ted Cruz (R-Texas) would try to stall a final deal before the midnight default deadline.
“There’s nothing to be gained from delaying this vote one day or two days,” Cruz told reporters, speaking at the same time as McConnell — causing cable TV networks to cut away from the GOP party leader.
Investors reacted by sending Dow Jones industrial average up more than 200 points.
Several Senate Republicans bluntly acknowledged their party’s failure to prevail as GOP approval ratings among voters nationwide went into the tank.
Sen. John McCain (R-Ariz.) called the default saga a “shameful episode” in the nation’s history.
And Sen. Kelly Ayotte (R-NH) added, “Where we are today just demonstrates that this was not a smart thing to do in terms of a strategy, and it’s why I didn’t support it from the beginning. And it’s time for us to move on.”
The deal represented a major defeat for the Tea Party, whose members demanded a defunding of ObamaCare as the price for keeping the government open.
Obama repeatedly vowed that would never happen — and he proved to be right.
“You’ve got to live to fight another day,” said conservative Rep. Jack Kingston (R-Ga.).
The deal reopens the government through Jan. 15, when more funding cuts are set to take effect, and raises the debt ceiling through Feb. 7.
It sets up a House-Senate conference on the budget, with a report due back on Dec. 13.
Lawmakers in both parties say the talks could be a vehicle for serious negotiations on the long-term debt.
But House Republicans conceded that, after losing this battle, they’ll be in a weaker position for the next fight against Obama.
ALL THAT FOR THIS
The deal:
- Reopen government with funding at current levels until Jan. 15
- Extend the debt limit until Feb. 7
- Lawmakers required to draft 10-year budget plan by Dec. 13
- Income verification required for those receiving ObamaCare subsidies
WINNERS & LOSERS
Winners:
- President Obama: He didn’t bargain. He didn’t flinch. He refused to back down as the government closed and default loomed — until Republicans surrendered.
- ObamaCare: Americans were too busy watching the chaos in Congress to notice the chaos of the botched rollout of Obama’s signature domestic initiative.
- Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell: The old bulls hunkered down and pulled off the bipartisan deal that saved the day.
- White House squirrels: They got to feast on tomatoes in First Lady Michelle Obama’s garden while federal groundskeepers were furloughed.
- Sen. Ted Cruz: He emerged a Tea Party hero with a national following, helping him win the conservative Values Voter Summit presidential straw poll.
Losers:
- House Speaker John Boehner: He lost control of his Republican members, lost the standoff with Obama, and had to rely on Democratic votes to pass the deal to avoid default.
- House Tea Party caucus: They fought to defund or delay ObamaCare, but got little more than a black eye.
- The American people: We probably have to go through all of this again in a few months when Washington approaches the new deadlines to fund the government and raise the debt limit.